Payslip help

swirlywirly
swirlywirly Registered Posts: 26 💫 🐯 💫
Hi everyone!

My boyfriend has asked me to look over his payslip to check everything was calculated correctly.

I did the PTC unit, and I do payroll at work so I have a good idea of how it should be. However there was one thing that struck me as odd:

His earnings for NI is slightly lower than the earnings for tax! It is only lower by 17.9%.

I have never come across this at work, or even in college. Does anyone know why the earnings figure used to calculate NI might be lower??

Thanks for any help.

ETA: he is paid monthly and this is for month 1 of this tax year.

ETA again: I've just had a thought. Would it be possible that he paid a bit too much NI last year, so they have reduced the earnings for NI to compensate? Unfortunately I haven't got his P60 to check this.

Comments

  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    Google "rates and allowances" and it will show you the main HMRC page. This will show you the thresholds at which tax and NI kick in.

    Yes, NI kicks in a bit before tax, this is correct. The difference at which it kicks in differs this year from last year percentage wise.

    NI is calculated on an 'as paid' basis so there would not be an adjustment for last year.

    Edit: it was only a few years ago that the NI and tax thresholds became disaligned; i think this was in 0809 when they put the personal allowance up part way through the year.
  • swirlywirly
    swirlywirly Registered Posts: 26 💫 🐯 💫
    Thanks for your reply! I'm not sure if it's to do with the allowances/thresholds being different amounts. See my fictional example...

    Gross pay: £1000
    Monthly allowance for tax: £623
    Monthly threshold for NI: £602

    Taxable income is therefore: £377
    NIable income is therefore: £398

    However the payslip isn't showing the figures like I've shown them here, instead it is basically saying "how much gross pay is used in the calculations", and has worded it as such:

    Total gross pay: £1000
    Gross for tax: £1000
    Earnings for NI: £821

    Note how £821 is 17.9% lower than £1000. Why wouldn't it base it on the £1000?? Very random!!

    Any more clues? Thanks :-)
  • zara5034
    zara5034 Registered Posts: 170 🎆 🐘 🎆
    So has the NI actually been calculated on £821 rather than £1000, (using you fictional example)?
  • swirlywirly
    swirlywirly Registered Posts: 26 💫 🐯 💫
    Hi Zara, yes the NI has been calculated using the £821 figure instead of £1000 :-)
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624
    Are there any benefits or contributions in his pay that don't have NI on them?

    Is the fictional £1000 just salary?
  • swirlywirly
    swirlywirly Registered Posts: 26 💫 🐯 💫
    Hi Bluewednesday, yes he has a monthly parking expense deducted, which is taken off his gross pay. This is roughly £40.

    So the complete payslip would actually look something like this:

    Total gross pay: £1040
    Gross for tax: £1000
    Earnings for NI: £821

    The difference between the figures for tax and NI doesn't seem to be anything to do with the £40 though.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆


    Note how £821 is 17.9% lower than £1000. Why wouldn't it base it on the £1000?? Very random!!
    I just had a look at some standard payslips that we produce for clients. Using your example, they all say both £1000 for tax and NI.

    I'm not sure why yours is different.
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