Tax and NI deductions...confused?

Question

Hi all,

I just received my first pay slip from my new job. I earn a gross salary of £24,000, so this means the tax I should be deducted is 22%, which I was. But the NI deducted was £173.80. This is 8.65%. Is this really high? My total deductions were £613. This means I was deducted a total of 30.65%! Before this job I was temping and my agency told me the total of tax and NI deductions should work out at about 25%. Last week someone posted a calculator on here that calculted your earnings after tax and NI deductions. I tried it and it didn't work out at a total deduction of 30.65%! Also, the tax code on the P45 of my last employmer is different to the code that my new employer has used on my pay slip...does this mean anything.

Sorry, I'm not from the UK so not really sure how tax etc works here. Could someone tell me if the amount I was deducted is correct?

Many thanks

Answer 1

Sounds about right.

NI is just another Tax - everyone focuses on "22%" when the real rate is more like 30% ...

NB. your Tax code reflects your 'personal allowance'. For example, if you code is 503L this means you are allowed to earn £5035 PER YEAR before Tax.

Unless you have other earnings, your Tax Code should be 503L.

Answer 2

If you have had tax deducted at a straight 22%, then it is the tax deducted from your pay which is wrong, not the NIC. Both tax and NIC are deducted after an exempt amount. It sounds as if your employer is operating code BR and not 503L (which gives the exempt amount). If this is the case, ask your employer why they are using this code and not the one on your P45 (did you give your P45 to your employer?)
If in doubt, is easier to go into your local Tax Office and they will explain as not enough info here.

Answer 3

it's about right - though the tax code on the p45 should match the payslip unless they are different tax years. NI is banded it's not a straight percentage. As a rough guide, expect to loose a third in tax and NI.

Answer 4

I earn a little less than you and my NI was £152.02 this month, maybe it'll settle itself next pay. The tax code for a single person is 503L - if your's is different you may have to query it with your pay department.


http://www.uktaxation.org/tax_code.html

Answer 5

the only way to know for sure is to get in touch with your local tax office as it varies from person to person depending on there circumstances. but if it is a new job you may have been on a temporary (emergency) code. however ni is completely separate from tax

Answer 6

I suggest you ask the Personeel department to look into this for you. It seems to me that the wages department have not given you the right allowances for your coding. I think they have put you on an emergency code which is 1/3 of your income.

Answer 7

You may be on emergency tax...which you can claim back. Speak to your HR department and ask them for your tax code... then call the Tax Office and ask them if that is right? This happened to me when I first started working in the UK four years ago.

Good luck

Answer 8

It seems about right - NI is a big chunk but has an upper limit

Answer 9

sounds as though you are on an emergency tax code

following this link for a payslip calculator - it may help

http://www.lowtax.co.uk/common/calculators/payroll.html

dont worry too much about it as any tax you do overpay you will get back albeit eventually ....

Answer 10

unless you are a British citizen for more than 2 years and get NHS and doctors etc, you will be on a week one basis which means you pay higher tax.