KIT days vs SMP

[ClareB83]

Pay/tax question. Last month I got £500ish statutory maternity pay and £700 tax rebate. This month I got £500ish for some KIT days and £100 tax rebate.

I thought it would be a similar tax rebate this month since my ‘pay’ was similar both months. It’s probably right but I’m not sure why. Is it because SMP doesn’t count as earnings at all but my KIT days do?

It's just your tax has been worked out on your ft salary. So you have earned more therefore entitled to less rebate. Annoying I know.

SMP and KIT days both count as earnings for tax.

The tax rebate issue is a complicated one to explain so bear with me. I'm presuming that last month was the first time that your earnings have dropped to that level?

Tax is calculated cumulatively so it's based on earnings for the year to date rather than each month individually. Annual tax free allowance is divided by 12 months, so for example in month 1 then 1/12 of personal allowance is offset against earnings for month 1. In month 2 2/12 of personal allowance is offset against earnings for months 1 and 2 and tax recalculated. So every month you have been using all your personal allowance and paying tax on the remainder.

The first month that your personal allowance outweighs your earnings you get a lovely tax rebate as for the year to date you have now overpaid on tax in previous months as well as this month. For following months the rebate is smaller.

£700 is very high for a tax refund though, are you sure there wasn't a change of tax code as well?

Thanks for the replies. Sorry I didn't get notified.

No tax code change. I think I'll just wait until the end of the tax year and check totals.

Thanks