Wish you understood your payslip and tax code? You’re far from alone! Here’s a helpful guide complete with links to make sure you’re earning what you should be…
If you’re an Appoint temp, you’ll receive your payslips directly from us. Payslips are issued on a weekly basis (and are sent the week after you last worked).
Essentially, each payslip details…
- Your earnings prior to all legal deductions. This is your ‘gross pay’.
- A breakdown of all deductions made. This includes your tax and National Insurance contributions, alongside any Student Loan repayments and similar. See a deduction that you don’t recognise on your slip? The Gov.uk website details the deductions that may be processed by your employer.
- Your total earnings after deductions. This is your ‘net pay’.
How much tax should you be paying?
Money Saving Expert has a handy calculator to help you estimate how much tax you should be paying…
- Don’t forget to check the ‘Use Advanced Options’ box to obtain a more accurate result. This will enable you to enter your Tax Code and state whether you have any student loan repayments to make, etc.
- The results are then detailed in a summary box, which rounds up your annual income, plus tax and National Insurance totals.
- Rather more helpfully, you’ll also receive a more detailed breakdown. This includes your gross (pre-tax) wage, how much of your wage is taxable, how much tax should be paid, your tax-free allowance, and National Insurance contributions, and similar. You will see results listed by year, month and week.
Please note: Money Saving Expert advises you to check your Tax Code to ensure your results are more accurate. So, let’s take a look at this next…
Are you on the right tax code?
Your tax code will vary by your personal circumstances.
- Gov.uk lists all the tax code letters to help you understand yours.
- For example, if you see ‘BR’ on your slip this means you’re being taxed at the basic rate pay. Employees with more than one source of income/pension will commonly be on this rate.
- If your tax code ends in either ‘W1’ or ‘M1’ you’re currently on an emergency tax code. These are temporary codes. They are most commonly used in new jobs (especially if you don’t have a P45 from your last role yet). Your tax code will be updated on receipt of the necessary details from your P45.
- There are a number of other circumstances which may cause HMRC to update your tax code.
- If you think your code may be wrong, you can use the gov.uk Income Tax calculator linked below.
Other useful tools!
Looked at the above and still have questions? You may find the following links handy…
- The Income Tax calculator from gov.uk. This is the most accurate way to calculate your Income Tax for the current tax year. However, unlike the Money Saving Expert link above, you’ll have to sign in to access the service.
- All contact details for gov.uk Income Tax general enquiries. You can use these contact details to check your tax code, seek information on the details HMRC holds regarding your employment, and to obtain an estimation of the tax you owe. Such a great help if you’re struggling with either of the online calculators!
We hope these links help and you feel much more confident the next time you look at your payslip! If you’re temping for Appoint and have any additional questions, please get in touch.