Payslip

[buggula]

Hi Guys,

I'm a newbie, have just started contracting.
Am using umbrella to process my payroll, have just had first payslip. The amount of tax that is being deducting seems very high. As i have submitted my P45 to them. Was wondering if anyone had an idea of the correct tax deduction amounts. The figues are:

Work period 18/05/04 - 04/06/04 @ 18ph = £2016

Deductions-
Employers NI: 192.60
Employees NI: 165.50
Tax: 358.11

Tax code: 474L

Not including service charge, expenses claim

Does this sound correct to you?
Any opinions or guidance would be greatly appreciated.

Thanks

[MisterGoof]

Just checked it with the calculator my accountant provides and I get

Employers NI: 207.36
Employees NI: 177.87
Tax: 336.33

So your total deduction is £716.21 and I get £721.56. But my calculations do not take nto account what youve earned so far this year.

so you seem to be better off by £5.25

Check the IR web site there should be some tables you can download to calculate it for yourself

MG

[buggula]

Thanks MG

I've checked and it should actually be:

£1971.05 Gross Pay for tax purposes, after Employers NI (£192.60) and service charge deducted.

And then:

Employees NI: 165.50
Tax (PAYE): 358.11

My total pay this year is £4631.81 (last job)
Total tax paid £804.39

The calculator that you mention, is that downloadable, is there a website i can get it from?

Thanks
Bug

[MisterGoof]

Heres a link bug

Inland Revenue PAYE tables from 18th May 2004

Its paper based but not too difficult

Enjoy

MG

[buggula]

Cheers

Will go home tonight and get the calculator out.

Do you know the rates that Employers and Employees NI should be charged at? I know Employers is something like 12.8%.

Bug

[rebeccaloos]

Rates:

employee NI is
- 0% on first £89 earned a week
- 11% on money earned between £89 a week and £595 a week
- 1% on earnings above £595 a week

employer NI is the same but the rate is 12.8% instead of 11%, also I am not sure you get the 1% above £595 a week

Of course, all these figures were pre-budget so the £89 and £595 might have increased a bit.

Dividends are taxed at 19% if you are paid that way - no allowance, it's 19% across all your dividends.

[buggula]

Sorry to sound stupid, am i right in saying that:

Employers NI would be at 12.8% for a gross mthly of just under £2000

After this deduction, the remainder:

Employees NI would be deducted at 11%
Tax would be deducted at 20%

and for gross mthly £2880 it would be same + the 1%

[rebeccaloos]

Well my understanding is that Employers NI would be calculated at 12.8% of £2000 minus the allowance which is £89 a week

I may be wrong

Then, that being deducted, yes the 11% is calculated out of the remaining, again minus the allowance.

And same again for the income tax for which allowances can differ depending on your status (e.g. married etc.)

Better ask an accountant I think, or someone who has been calculating their own stuff for a while and who knows....

[buggula]

Thank you for your comments and advice,

I've found a previous post where they were offering a umbrella payslip checking service. Hopefully they are still accepting requests.

Bug

[ASB]

That payslip

From the info you have provided:-

Gross Pay = 1504.68
Ers Ni = 192.60 (12.8%)
Ees Ni = 165.50 (11%)
Tax = 256.80 (273.75 @ 0; 116.53 @ 10%; balance @ 22% assumes everything correct previously).

On the face of it you may have been overcharged tax, but that depends on whether you had previously paid all that was required. Alternatively they could have processed this all as month n rather than weekly.

You might wonder why the gross pay I have listed is 1504.68 - that it because it is correct for the NI figures.

Add on the Ers NI to get to 1697.28. It would appear that 318.72 has been deducted for the fees. This would appear to be fees of 13.5% + vat which seems rather high..

Rates and allowances www.inlandrevenue.gov.uk/budget2004/pn02.htm