tax

[dosset]

could someone explain how the tax system works with regards to earnings. If the first �2150 is @10% and the remainder up to �33000 is 22% why can i only arrive at my tax deductions as if all has been taxed at 22%??

[Im a BusyBee]

is this as an employee on a payroll?If so what is your tax code because that gives you tax free pay?

[dosset]

515l

[Im a BusyBee]

so that means you will earn �99.03 per week tax free (or �5150 per year). say you earnt �10,000 in the tax year the first �5150 would be tax free, leaving �4850 to be taxed, the first �2150 of that at 10% the rest at 22%. Hope this helps.

[Im a BusyBee]

Forgot to say if your are on a Mth1/Wk1 tax code that will change the calculation unless you are only looking at one week/month at a time.

[dosset]

paid weekly/ but every time i do the caluculations ,allowing for NI & tax allowances the ans still comes out as if all taxable earnings have been deducted at 22%

[Im a BusyBee]

without asking more questions and getting facts and figures i cant say anymore but it doesnt sound right to me. Do your employers have your tax code detailed on payslip? 22% on all earnings is whats called BR coding and not correct if you have (and they are using) a code of 515L. BR would be correct if either you didnt have a P45 and ticked box to say this ISNT your only or main job, or you told them it wasnt your main job and your allowance is used on other earnings.I should speak with your local tax office so that you have all the info in hand then speak with your payroll department.

[Im a BusyBee]

Also this is only tax we are talking about here NI is something else and an extra deduction to the tax % and figures previously mentioned. So you should just work on the tax deducted and not NI as well.

[dosset]

thanks busybee but the way i read it both ones tax allowance and NI plus any pension payment are all deducted from ones gross wage before the tax calculation is applied.Cannot get either mine or my wifes tax to work out correctly using the two tax figures ie 10% & 22%.no problem if i just use 22% .cannot understand what is going on

[Im a BusyBee]

well you've filled in a bit more of the picture by mentioning pension....if you are above state retirement age and receiving state pension i believe it is correct that all earnings are taxed at BR and corrected at end of year when your self assessment form goes in. Remember your state pension is also an income and (again as i believe it) your pension would more than use up your tax free allowance.

[dosset]

thanks once again busy bee . the ans to my question appears to be related to N I .i wrongly assumed NI was taken out before tax but it is not so if i recalculate the figure using 10% & 22 % the tax deductions are correct
any way once again many thanks for your help

[keithlbw]

Try this site,it will do all your calculations for you.

http://www.listentotaxman.com/