Question on Tax and NI

[HappyChappy]

Hi i have a spreadsheet which works out what wages i can expect each month and this part works great it matches my payslip except....
The Tax and NI always seem to be a little out compared to my payslip and was wondering is there a particular formula for working this out
my tax code is 1350M
Would appreciate any help thank you

 

[HappyChappy]

Here is an example with some of the data which you might need tried online calculaters all seem to be close but not exact and don't tell you how they are achieving the results they show.

 

[HappyChappy]

The problem i have is that i'm paid 4 weekly this is fine i'm in the 20% bracket earning £35,000 tax code of 1350M which gives £13,500 tax relief.
my payslip start showing tax from week one so how do i work a formula that does this but also allows for the fact that my wages will vary due to overtime etc.
i'm missing something but the websites don't break it down other then what % for different bands.
So i'm paying tax from week 1 even though I haven't reached the tax threshold of £13,500 is the formula acting on 13 payslips per year i'm baffled probably something really simple but i just can't seem to get it.
Hope i'm making myself clear

 

[Joe4]

There seem to be a number of different ways to do this, such as:
1. Not withholding any tax until the $13500 year-to-date value is hit
2. Treat every paycheck as if it were exactly 1/13 of the year, so your taxable base would be the total wages for that pay period less ($13500/13).
3. Do some sort of hybrid approach, where you take the average of the amounts paid per pay period this year, figure out what the YTD tax should be so far, and subtract what you have paid so far to get to that amount.

I imagine that there are other methods that companies may use also, especially if your company does mid-year raises, and they want to try to incorporate that into the formula.

We really cannot tell you what method your pay company is using. Your best bet would be to reach out to them, tell them that you are trying to understand your paycheck, and ask them to explain how they arrive at that amount.

 

[HappyChappy]

Have tried the wages dept and the young girl stated no idea "i just enter your hours and the software does the hard work sorry can't help you any more than that.
About to start completely new year and new tax code of 1350M so no historical data to use. other than the pay slip attached.

 

[Joe4]

Have tried the wages dept and the young girl stated no idea "i just enter your hours and the software does the hard work sorry can't help you any more than that.

I wouldn't count on anyone in the payroll department knowing anything. I was talking about reaching out to the software company directly (or indirectly through your payroll department).

I was playing around with the numbers, and could not get arrive at the numbers shown on that payslip. However, I know that in my paycheck, they tax "bonuses" differently than they do regular wages. I am not sure where you are located, but here in the States, it all kind of washes out after the end of the year when you calculate your taxes based on your numbers at the end of the year, and you either get a refund or owe additional tax (of course, there are other factors, like various deductions and credits involved also).

The point being, is I think that unless there is someone on this board who is a tax expert in whatever country you are located, I don't know if anyone here is going to be able to tell you exactly how they are arriving at those numbers (which is probably why you have not gotten any replies over the past few days). That is why I am suggesting reaching out to the source - the software company.

 

[HappyChappy]

I wouldn't count on anyone in the payroll department knowing anything. I was talking about reaching out to the software company directly (or indirectly through your payroll department).

I was playing around with the numbers, and could not get arrive at the numbers shown on that payslip. However, I know that in my paycheck, they tax "bonuses" differently than they do regular wages. I am not sure where you are located, but here in the States, it all kind of washes out after the end of the year when you calculate your taxes based on your numbers at the end of the year, and you either get a refund or owe additional tax (of course, there are other factors, like various deductions and credits involved also).

The point being, is I think that unless there is someone on this board who is a tax expert in whatever country you are located, I don't know if anyone here is going to be able to tell you exactly how they are arriving at those numbers (which is probably why you have not gotten any replies over the past few days). That is why I am suggesting reaching out to the source - the software company.

Joe read with interest you response over NI contributions. I have a problem with setting up a spreadsheet to work out my tax and NI due every 4 weeks. is this something you might be able to help with

 

[Joe4]

Joe read with interest you response over NI contributions. I have a problem with setting up a spreadsheet to work out my tax and NI due every 4 weeks. is this something you might be able to help with

Unfortunately, I don't think it would do much good. I cannot come remotely close to the values shown, so I don't think it would be of much value.

Note that I see on the Tax Code line it has "1350M W1". Do you know what the "W1" means?
Here in the States, on your taxes you have to declare the number of exemptions you have (i.e. number of dependents), and that affects your taxes.
So there may be some other factors at play here that you have not told us about.

Also, here in the States, the IRS (Internal Revenue Services, which is the branch of the government that handles taxation), has many documents on their web site, such as worksheets, which help to determine these things. You may want to check to see if your government has any documents on-line that may help you calculate these things (and may even show you how to arrive at these numbers).

Note that a local accountant, tax attorney, or other tax specialist may be able to help you figure this out too.