Hi,

I've just got my payslip, and im a bit confused, i have no idea about any of this tax stuff, but i think im being taxed and i shouldnt be, can anyone tell me what it all means?
I have the deduction box which has the Tax & N.I in it (i understand that bit)
Then i have a accumulations box with National insurance, Tax, Taxable Pay, and Employers N.I and this is what threw me a bit.

What does the taxable pay mean? Because if that is how much i have earned to date, i shouldnt be getting taxed.
I only look into it because they have done this before.

But also recently my tax code has gone higher so i can earn a bit more before i get taxed.

Im really confused by this, if anyone can help em out, it would be much appreciated, because i need to know whether to speak to HR about it

Cheers,
Jade

 

You must be keen for answer and dont trust the muppet room entirely

 

you can earn a set amount throughout the year before you get taxed on it
depending on how you get paid they will either divide it into 52 weeks for weekly pay and tax you accordingly or they will divide it by 12 and again, tax you accordingly

so if you were to earn £12k a year as a basic and your tax code was 360 and you got paid monthly, you would get a grand a month and out of that you would pay anything you earnt over £300 at the normal rate of tax (22% i think) and everything you earn as national insurance (10% i think)

they are the basics but i also have bupa cover and other stuff like pensions and the like going from my pay which adds anothe £100 a month or so to the total deductions

 

you also mentioned total pay, that will be the total amount of money from that employer you have earnt in this financial year, together with the total deductions they have taken from you

if you don't earn a set amount within this financial year you can claim back the tax

 

An easier way to describe it in laymans terms is....

Say you earn 15k per annum
Your tax code is 500L - so that means you are allowed 5k tax free
So your taxable earnings are 10k
This is spread over the tax year on an accumulation basis.

Many people think because they are allowed 5k tax free that they don't pay tax until they have earned 5k, this is wrong and is the reason why you have a Tax Code which is spread over 12 months.

HTH

 

well put lynne.

surely everyone must be able to understand that!

 

Also worth pointing out- if you earn less than your allowance you shouldn't be taxed on it- but there is no real way the HMRC will know this- hence why you have a tax code- and need to claim the tax you pay back.

NI however is a must.

Jake

 

You'd hope so Matt