The Student Room Group

Was my employer over taxing me?? Please help

Okay so basically i was with my employer from May of this year (although i left this week and now moving onto another position). I am not too sure of what my tax code is as it’s just an a nightmare getting through to hmrc and i kept getting cut off and left on hold for an hour.
My taxes with my new employer seem unusually high, i’ve had many jobs in the past but it just seems extortionately high. The salary was meant to be £25,500 pa paid on the 31st then with the commission paid on the 15th of the month. The commission is also taxed and is around £250-£500 every month. Last time I checked online the take how pay for this salary should usually be around £1750 for the basic but mine is significantly lower which i find strange. Is this normal? I also haven’t been a uni student since 2015 and had a regular student loan so i’m not too sure why the student loan tax is always so high either. It’s not letting me post a photo but basically my last payslip for example said my base pay was £2125 that month, then there’s £311 PAYE tax, £177 national insurance, £88 ee pension, and £96 going towards student loan so i ended up only getting £1455.28 which is the same amount as the month before - which is imo a very large amount of tax. I was a full time employee if that made any difference, with a european passport but have lived in the Uk since age 4 and have settled status. On my payslip it says that my tax code is 1257l but i’m not sure this is right. The commission also gets taxed anywhere from like £30 to £200 too so if really left me with a measly amount of money.
(edited 7 months ago)
Reply 1
Okay so basically i was with my employer from May of this year (although i left this week and now moving onto another position). I am not too sure of what my tax code is as it’s just an a nightmare getting through to hmrc and i kept getting cut off and left on hold for an hour.
My taxes with my new employer seem unusually high, i’ve had many jobs in the past but it just seems extortionately high. The salary was meant to be £25,500 pa paid on the 31st then with the commission paid on the 15th of the month. The commission is also taxed and is around £250-£500 every month. Last time I checked online the take how pay for this salary should usually be around £1750 for the basic but mine is significantly lower which i find strange. Is this normal? I also haven’t been a uni student since 2015 and had a regular student loan so i’m not too sure why the student loan tax is always so high either. It’s not letting me post a photo but basically my last payslip for example said my base pay was £2125 that month, then there’s £311 PAYE tax, £177 national insurance, £88 ee pension, and £96 going towards student loan so i ended up only getting £1455.28 which is the same amount as the month before - which is imo a very large amount of tax. I was a full time employee if that made any difference, with a european passport but have lived in the Uk since age 4 and have settled status. On my payslip it says that my tax code is 1257l but i’m not sure this is right. The commission also gets taxed anywhere from like £30 to £200 too so if really left me with a measly amount of money.
Original post by heyhi383828
Okay so basically i was with my employer from May of this year (although i left this week and now moving onto another position). I am not too sure of what my tax code is as it’s just an a nightmare getting through to hmrc and i kept getting cut off and left on hold for an hour.
My taxes with my new employer seem unusually high, i’ve had many jobs in the past but it just seems extortionately high. The salary was meant to be £25,500 pa paid on the 31st then with the commission paid on the 15th of the month. The commission is also taxed and is around £250-£500 every month. Last time I checked online the take how pay for this salary should usually be around £1750 for the basic but mine is significantly lower which i find strange. Is this normal? I also haven’t been a uni student since 2015 and had a regular student loan so i’m not too sure why the student loan tax is always so high either. It’s not letting me post a photo but basically my last payslip for example said my base pay was £2125 that month, then there’s £311 PAYE tax, £177 national insurance, £88 ee pension, and £96 going towards student loan so i ended up only getting £1455.28 which is the same amount as the month before - which is imo a very large amount of tax. I was a full time employee if that made any difference, with a european passport but have lived in the Uk since age 4 and have settled status. On my payslip it says that my tax code is 1257l but i’m not sure this is right. The commission also gets taxed anywhere from like £30 to £200 too so if really left me with a measly amount of money.

Those numbers are about right. The tax code (1257L) is what most people will be on. I can't work out for PAYE and NI liabilities accurately because phrases like "around £250-£500 every month" (for your commission) are too vague.

If we split the difference, and assume it's £375 per month commission, or £4,500 per year, then you're total income (salary and commission) is £30,000 per year. On a 1257L tax code, that would mean Income Tax (PAYE) of £290.35 (close to the £311 you quote) and £174.30 NI (close to the £177 you quote). The difference is almost certainly in the commission estimate I've used.
1257l is the standard code for most people, if you were taxed a lot higher at the beginning it is likely you were under the emergency tax bracket whilst HMRC determined your proper tax code. You should receive this back over the course of your wages so that you pay the correct amount of tax by the end of the tax year.

If you earn commission this can complicate the tax somewhat. I've never been on commission myself but I've worked with people who have and they said something along the lines of if you earn a lot of commission then HMRC thinks this is your 'new wage' and taxes you accordingly or something.

Honestly if you are worried about it you are best phoning HMRC directly even if it is a nuisance.
Original post by heyhi383828
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@heyhi383828 I think your student loan repayments could be too high.

I’m assuming (from the date you gave) that you are on a Plan 2 student loan. In which case, you’ll repay 9% of your income over the threshold £27,295 (or £2,274 per month). So using @DataVenia’s estimate of £30,000 per year, your gross pay is £2,500 per month. So the calculation for your student loan repayment would be £2,500 - £2,274 = £226 * 9% = £20.34. (If I've assumed wrong and you’re on Plan 1, the threshold is lower (£22,015 pa/£1,834 pmth) and the calc is £2,500 - £1,834 = £666 *9% = £59.94).

Either way, a payment of £96 is excessive. It's not uncommon for mistakes to be made on student loan repayments but it can be resolved easily and if you have overpaid you can claim a refund. Read the following article and take action:

https://www.moneysavingexpert.com/students/student-loan-overpayment-refund/

Also, for future reference, this is a good calculator (particularly if you use the 'Advanced options') to see what deductions you should be paying:

https://www.moneysavingexpert.com/tax-calculator/
(edited 7 months ago)
Original post by CoolCavy
1257l is the standard code for most people, if you were taxed a lot higher at the beginning it is likely you were under the emergency tax bracket whilst HMRC determined your proper tax code. You should receive this back over the course of your wages so that you pay the correct amount of tax by the end of the tax year.

If you earn commission this can complicate the tax somewhat. I've never been on commission myself but I've worked with people who have and they said something along the lines of if you earn a lot of commission then HMRC thinks this is your 'new wage' and taxes you accordingly or something.

Honestly if you are worried about it you are best phoning HMRC directly even if it is a nuisance.


I agree

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