The Student Room Group

Do expenses get paid on top of your net pay?

I am really confused I have just got my first wage slip and my expenses have been deducted from my gross wage and then added back on for tax purposes... Which I dont get. Will my expenses be paid to me on top of my wage or included in it. I am so confused and they just sent me an email saying 'You have the ability to claim any legitimate business expenses, these are deducted from your GROSS wage before any tax/NI deductions have been taken, once these have been made to HMRC, your expenses will get added back on. The expense amount is basically Tax and National Insurance free'

Can someone help clear the confusion
Reply 1
Original post by trifleontoast
I am really confused I have just got my first wage slip and my expenses have been deducted from my gross wage and then added back on for tax purposes... Which I dont get. Will my expenses be paid to me on top of my wage or included in it. I am so confused and they just sent me an email saying 'You have the ability to claim any legitimate business expenses, these are deducted from your GROSS wage before any tax/NI deductions have been taken, once these have been made to HMRC, your expenses will get added back on. The expense amount is basically Tax and National Insurance free'

Can someone help clear the confusion


All expenses are paid net (Ie: you don't have to pay tax on them).

So from the sounds of it as an example:

Salary: £2000
Expenses: £200

Gross payment: £2200

Your company then deducts £200 before submitting to HMRC for tax/NI.

Tax is taken off from the £2000, leaving say £1400.

£200 is then added back into the £1400 to get a net pay of £1600.


You need to double check that the gross salary figure is your normal salary + expenses, if they are then deducting the expense amount before tax.
(edited 9 years ago)
Original post by Reue
All expenses are paid net (Ie: you don't have to pay tax on them).

So from the sounds of it as an example:

Salary: £2000
Expenses: £200

Gross payment: £2200

Your company then deducts £200 before submitting to HMRC for tax/NI.

Tax is taken off from the £2000, leaving say £1400.

£200 is then added back into the £1400 to get a net pay of £1600.


You need to double check that the gross salary figure is your normal salary + expenses, if they are then deducting the expense amount before tax.


Thank you for the reply. They've actually put my 'gross pay for tax' as salary - expenses. So I am so confused
Reply 3
Original post by trifleontoast
Thank you for the reply. They've actually put my 'gross pay for tax' as salary - expenses. So I am so confused


It sounds like they're trying to make you pay for the expenses yourself and then just put in for tax relief on that payment.

What were the expenses? Also can you confirm that your 'gross pay for tax' is deffiniatly equal to your normal salary MINUS the expenses amount?
Original post by Reue
It sounds like they're trying to make you pay for the expenses yourself and then just put in for tax relief on that payment.

What were the expenses? Also can you confirm that your 'gross pay for tax' is deffiniatly equal to your normal salary MINUS the expenses amount?


It was for petrol, and it was approved as being legit for an expense claim so I dont understand, I dont get paid until tomorrow either so wont know what they pay me. I havent earned enough to pay any tax or NI so I didnt have any deductions and didnt earn enough for them to take a deduction from me either (they take 5.50 each day you earn over 90 pounds) I feel like they are trying to make me pay for the expense.

Yes it is equal to what I should get minus the expense.
(edited 9 years ago)
Reply 5
Original post by trifleontoast
It was for petrol, and it was approved as being legit for an expense claim so I dont understand, I dont get paid until tomorrow either so wont know what they pay me. I havent earned enough to pay any tax or NI so I didnt have any deductions and didnt earn enough for them to take a deduction from me either (they take 5.50 each day you earn over 90 pounds) I feel like they are trying to make me pay for the expense.


If you are under the tax thresholds then your net pay should be exactly equal to your salary + expenses. It does sound like they are expecting you to pay your own expenses.

What is that £5.50 deduction for?
Original post by Reue
If you are under the tax thresholds then your net pay should be exactly equal to your salary + expenses. It does sound like they are expecting you to pay your own expenses.

What is that £5.50 deduction for?


Its for 'admin purposes'. I plan on not earning above 90 pound anway as I am at uni and only want to earn a bit of cas. I work for an agency. should I get in contact again and ask if I have to pay for the expense myself?
Reply 7
Original post by trifleontoast
Its for 'admin purposes'. I plan on not earning above 90 pound anway as I am at uni and only want to earn a bit of cas. I work for an agency. should I get in contact again and ask if I have to pay for the expense myself?


Ahhh, you should have specified that in the beginning! It changes everything.

Agencies work very differently and many will effectivly have you as 'self employed' but managed through them and so will be liable for your own expenses. The way they've done the salary minus expenses and then added it back onto net is to save you the hassle of claiming any tax back on your expenses from HMRC directly.

The admin fee is particularly dodgy but, i believe, legal as I've read about it from other agencies too.

I would contact them but wouldn't expect it to be the response you'd like..

Agencies can have very complicated arrangements to try and avoid as much tax and salary payments as possible. If you're still unsure I'd go to the citizen's advice or similar for more indepth information.
(edited 9 years ago)

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