Please help me understand PAYE

[Bythehairywartsonmywitchychin]

Just checked this months wage and I’ve had way more PAYE taken off this months wage than previous months. Is it normal to take so much in one go? I thought it was taken at the end of the new tax year.

I’ve tried to figure it out, but am at a loss. I started a new job in June first couple of months had no PAYE taken, I queried it with HMRC at the time and was told it’s because I’d not earned enough and due to my personal tax amount. PAYE kicked in at 3 months and for the last 2 months was roughly the same. This month they’ve taken over a grand off of me.

So even if the first 2 months was wrong and I should have paid, I work it out that I should have paid approx £1500 in PAYE based on just under 28k annually, minus what I’ve paid is less than the grand that they’ve taken off.

Anyone any ideas? Have they keyed it wrong and do I owe it’s tax code is the standard one.

Last bit should read

Anyone any ideas? Have they keyed it wrong, or do I owe it? The tax code is the standard rate.

What does your tax code say? Use this sight to work out what your pay should be www.thesalarycalculator.co.uk/salary.php

@FitAt50 that’s the calculator I used, Tax code is 1257L

Were you earning in April and May in an old job?
Can you find all your payslips for this tax year?
How much have you earnt this year, and how much tax have you paid?
Very roughly, assuming a constant salary of 28k each month you would get 2300 earnings, of which 1300 would be taxed at 20%, so 260 tax per month, plus NI. Pensions affect this.

No I wasn’t earning before June, is that something to do with it?

I calculated it around £250 month in tax, for the first 2 months were no tax was taken, 3rd month just under £200 and then the last 2 months they’ve taken around £230 so under the £250. I thought if I’d under paid they adjusted it next tax year.

I’m happy paying what I need to, but HMRC said it was right when I queried the 2 months of no tax.

ok, this is the way PAYE works.
Say your allowance is £12.750 a year and your on 24k a year.
You earn 2k per month.
April 1k before tax. no income.
May 2k before income no income.
June 3k before income, Total wages 2K . no tax.
July 4k before income, Total wages 4k,,,, no tax.
August 5k before income, Total wages 6k taxed on the 1k over at 20% so £200 tax for the month.

September 6k Say you were ill and earnt no money your total wages for the year would still be 6k from last month so you would get a refund of the £200 you paid l ast month.
So each month the amount you can earn goes up by 1/12 of the years amount, and once your total wages go over the months limit they work out your tax for the year so far and you pay the amount to reach that figure,

Tax is calculated on year to date figures.

On 1275L you can earn £1048 per month tax free.
So as June was your first paid month you had 3 full months of tax free pay to use up (£3100 ish)

Thanks everyone so is anyone able to advise me if over £1000 paye taken off this months wage correct?

If I've understood your messages correctly, you've earnt 14k this tax year (June, July, Aug, Sept, Oct, Nov)
8500 of that is from your tax free allowance (8 months worth from 12750).
So, 5500 taxable at 20%. 1100 tax due ytd. Pension, student loans, other stuff will affect this. Suspect 1000 this month is too high given you've paid some tax in previous months.
There will also be 184 NI deducted each month you have been paid.

Work out how many days have passed since 6th April.
239/365 your tax rate is £12570. so that means your allowed to earn £8230 so far this year before you pay any tax.
you say your on £28000 a year, and if you started work in June, you would have had wages in 5 months of the year so far.
£28000 6/12 £14,000 earnt so far this year.

£8230 is your tax free money this year, so far.
£5770 is what you would be taxed on at 20%.
£1154 is what you would have paid in tax so far this year.

Gross pay is £13,300 (approx)
Taxable pay £19400 (approx)

Had paid in total £620 in PAYE last month they’ve taken over £1000 this month

Gross pay is earnings before any deductions. How is 6k more than that taxable? Have you got a company car? Some massive other taxable benifit?

I mean in total from June to October total PAYE was £620 (first 2 months none was paid) this month PAYE is over £1000 mailing the tax paid £1700 approx

No it is pay as you earn.
Meaning the payroll is calculated to the date of the company payroll.
So the payroll takes your Tax code, which tells them how much your allowed to earn in a year,
This then gets divided by 365 for a daily allowance.
Then they work out how many days have passed since 6th April. they times your daily tax allowance by the number of days.
This says how much your allowed so far this year BEFORE tax,
This figure is taken away from your income earnt so far in the tax year from April. What is left is taxed at 20%,
This the amount they need you to pay in the year to date.
So while your pay slip only shows your pay for the month and the Tax taken, it's actually the amount over the year so far,
Also any overtime you get paid would be taxed at 20% as your already over your tax free allowance for the year so far.

Pensionable pay is £13,300 (approx)
Taxable pay £19400 (approx)
Tax paid £1700 (6 months pay slips)
Up to this month I’d paid £620 in PAYE

What ever has happened i’m a lot of money short this month. It’s nearly half my wage gone, I’m happy to pay it if it’s been calculated wrong before but over a grand is a lot of money all at once

@Bythehairywartsonmywitchychin

Gross pay is £13,300 (approx) Taxable pay £19400 (approx)

Had paid in total £620 in PAYE last month they’ve taken over £1000 this month

if your saying your have been paid £13,300 so far this year, into your bank. But you have earnt £19,400. Then you have had overtime?
£19,400 less £8,230 is £ 11,170 at 20% is £2,234 payable so far this year, in tax. £19.400 less tax of £2.234 is £17,166, less £3866 for other deductibles.pensions, and NI to get to £13,300

Did you have another job this year?
As that could effect it. if not you seem to have paid a lot of deducatables.

If you hadn't worked this tax year until June you had April's and May's tax free allowance 'banked' so this gets used up first. You should pay £250 ish per month now.
£1000 is wrong based on a 1257L code unless you've underpaid at some point, check your code for this month. Tax is cumulative so you're nearly always working on a year to date figure.
What's your code and pay to date figure?

Have you spoken to pay roll ?

Tax code is 1257L
Taxable pay is £19400
Tax paid is £1700
Pensionable pay is £13300

I thought £250 sounded about right for PAYE

I’ve had PAYE deductions of (£0 PAYE for 2 months, just under £200 for 1 month just under 230 for 2 months and over £1000 PAYE this month)

@JSL52 not yet it’s my first task tomorrow, last time I called them when I first started about £0 PAYE they told me it was wrong and when I spoke to HMRC they told me it was right and I’d start to pay in a couple of months which is what happened.

I just just wanted fo understand myself if it was right before I call payroll tomorrow

You will be paying 20% on income over £12570 that's divided over 12 months. In addition there's ni which is a lot.

It is the fact your only half way through the year, on a £28k salary, it you have earnt £19k so far this year. If you earn the same for the rest of the year , you will have been paid £38k not £28k.
The tax if you look at my breakdown above. I think you may have had job before this one, and they were using your tax code as if an only job this year, then your figures caught up so they taxed you on your pay from other job.

I’ve not had another job this year I was claiming UC. I’m going to have a look at my pay slip again as it doesn’t seem right. I’ve not done any over time