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Net pay < 50% gross

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    Net pay < 50% gross

    Hi,

    My company were late paying - last week I was paid for three weeks (including two missed weeks) this week I have been paid as usual.

    Both payslips show that my net pay is < 50% of what I am grossing. I am expecting something in the region of 55%.

    Can anyone hazard a guess as to what may be happening - tax code is 0L if that is any help.

    #2
    Holiday paid in advance I take it

    You've ended up with a large amount being paid in the 45% (over £150,000) income tax band due to 3 weeks money going into the same 1 week payment. Now I don't 100% know how the calculator your umbrella uses works but I suspect the income tax deducted was based on an assumption that all weekly payments will now be that very large figure (remember we are early in the tax year).

    There is nothing you can easily do to fix it but it will resolve itself in February / March next year as most of the overpayment is corrected in subsequent pay runs.
    merely at clientco for the entertainment

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      #3
      Originally posted by eek View Post
      Holiday paid in advance I take it

      You've ended up with a large amount being paid in the 45% (over £150,000) income tax band due to 3 weeks money going into the same 1 week payment. Now I don't 100% know how the calculator your umbrella uses works but I suspect the income tax deducted was based on an assumption that all weekly payments will now be that very large figure (remember we are early in the tax year).

      There is nothing you can easily do to fix it but it will resolve itself in February / March next year as most of the overpayment is corrected in subsequent pay runs.
      Yes - holiday paid in advance.

      Comment


        #4
        Originally posted by TheDude View Post

        Yes - holiday paid in advance.
        In which case you've just been paid 16.8 days money within a single tax week early in the tax year. That would put a significant amount of it in the £150,000+ 45% band which would easily take you below 50% take home pay.
        merely at clientco for the entertainment

        Comment


          #5
          This whole PAYE model is an absolute farce, there's just no consistency - my pay seems to change regularly by a few quid here and there, and woe betide your timesheet doesn't get approved every week so you end up getting a chunk of money taxed at a different rate like TheDude...

          Surely, there has to be a better way for temporary workers to get paid. There are just so many downsides to it.

          Comment


            #6
            Originally posted by ensignia View Post
            This whole PAYE model is an absolute farce, there's just no consistency - my pay seems to change regularly by a few quid here and there, and woe betide your timesheet doesn't get approved every week so you end up getting a chunk of money taxed at a different rate like TheDude...

            Surely, there has to be a better way for temporary workers to get paid. There are just so many downsides to it.
            How would you suggest to improve it?
            You're taxed at source based on a simple formula, calculated at every pay day, that assumes you will continue to be paid the same at every subsequent pay day for the rest of the tax year.

            Any system that taxes at source has to make assumptions. What assumptions would you prefer they make?
            The alternative is you do all your tax at SATR. If you struggle week by week you're gonna be really ****ed if done by SATR.

            This is the same problem permies have..

            You sure you're cut out for working?
            /NLUK mode
            Last edited by Lance; 14 May 2022, 09:47.
            See You Next Tuesday

            Comment


              #7
              Maybe an idea to phone up HMRC and ask to be changed to a tax code like 1257L, advising them that you are not expecting to be earning all year.

              Doesn't make a difference really, but getting the extra 10% up front and paying excess tax later should you resume 0L is an option.

              After all, there is always the possibility in December you will have had enough and choose to take the rest of the tax year off.

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