Payslip Help

[jamiedodger]

I'm not too bothered giving details of my earnings, so I'm going to give all the figures in the hope that somebody can help.

I'm on �12177.00 a year. Just got my first payslip and my tax code is "522L NONCU". My gross for the month was �1014.75 but there are deductions of course, on my payslip they are �91.66 Tax, �53.57 NI D and �60.89 Pension. So I ended up with �808.63. Fair enough.

However, I have a few questions. First of all, why did I pay �91.66 tax? This is around 9% of my income. Shouldn't I pay 22%?
Also, if I opt out of the NHS pension. Does this mean I will pay more tax, or will all of my contributions remain the same but just the pension won't be deducted?
Finally, I should get �5220.00 without tax shouldn't I? So why has tax been taken out when I haven't earned �5220 this year? Or is it taken on all income and then refunded next year? very very confused.

[CheekyChops]

The first �5225 of your income is tax free (as indicated by your tax code), the next �2230 is taxed at 10% and the final �4722 is taxed at 22%.

By my reckoning you should pay around �100 tax per month, which isn't far off what you have actuallty paid.

They don't let you earn �5225 free and then start taxing you after you have reached that, you start paying tax straight away and at the end of the tax year, if you have overpaid you should get a refund.

[WoWo]

I wouldn't get too excited about a refund either, it's normally just in the form of a new tax code which would be issued next year.

[kempie]

If you opt out of the pension the �60.89 is added to your taxable income. It will be taxed at 22% (�13.40) giving you an extra �47.49

[jamiedodger]

Huh? So what happens to the refund? I don't actually get a refund? Don't really understand that.

Also, if I opt out of the pension. Would my entire salary be charged 22% or just the �60 that I would have paid for the pension?

[kempie]

Any "refund" will find its way to you through your pay.

The �60.89 returned to your taxable income would be taxed at your highest rate (22%).

An amendment to my earlier answer - I did not originally notice that you pay NI D i.e. the NHS Pension Scheme is contracted out of the State Second Pension (SP2). This means you currently pay a lower rate of NI contributions. If you opt out of this pension your NI will increase by around �9, thus the total increase in takehome pay (from previous answer) is reduced to around �38.50

[LKay]

Dear all,

It is a common thing that people are flummoxed by the jargon and codes on their payslips.

I have come across a tool to help with this.An interactive map of payslip with a key to unlocking the mystery of all the abbreviations and deductions etc..

Hope you find it useful. Here is the link:

http://www.ceridian.c...ip/1,4102,486,00.html

Best of luck

LKay Media URL: http://www.ceridian.co.uk/hr/nav/payroll_advice/payslip/1,4102,486,00.html
Description: Understanding your payslip - an interactive map of what everything on your payslip means