PAYE Tax

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Your NI calculation: =(B3-968)*0.1325

Hi.

Thank you for your reply. All data shared is okay to share. Thank you. Thank you for the N.I formula, but my question was relating to tax if you're able to check again and assist?

Many thanks.

Try this:

=(B3-12630/12)*0.2

Long time since I've done this but, if it is 4 weekly, divide your annual tax allowance by 13 and subtract that from the 4 weekly pay and subtract your pension.

Please see the attached updated workbook.

National Insurance contributions
The rates of National Insurance contributions (NICs) for both employees and employers are increased by 1.25 percentage points for 2022/23. For employees, the rate of NICs is set at 13.25% on all earnings between the primary threshold and the upper earnings limit, and at 3.25% on earnings above the upper earnings limit. For employers, the rate of NICs is set at 15.05% on earnings above the secondary threshold.

The primary threshold is set initially at ?190 per week, rising to ?242 per week from 6 July 2022. The secondary threshold is set at ?175 per week for the whole of the 2022/23 tax year. The upper earnings limit is set at ?967 per week for 2022/23, so that it remains aligned with the income tax higher rate threshold.

Is this resolved now? If not, how else may we help you?

You're welcome.

You don't need SUM bracketing the calculations.

Note: I changed cell A1 to just contain the allowance value of ?12,630 and used a Custom Format to add the text. That meant I could use

Formula:

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I spent 26 years as a tax inspector (4 of which were spent testing Payroll software), if you need a calculation to the exact penny (including rounding rules) then let me know and I'll post what I have.

...still having a few issues...

I am not sure which calculations are causing issues?
That said, I have modified the formulas in column D so that they round to 2 decimal places which has brought the value in cell D17 closer to what is manually placed in cell B17.
Let us know if you have any questions.

Apologies i hadnt seen your previous message, when i get to my machine i'll take a look

So there are a couple of things slightly out,

1. Freepay should be calculated as tax code with a 9 on the end, ie in this case 12639 (generally you will read that its a zero, its not it should be 9 (see point 4 below)

2. You then take that and divide it by the number of periods (in this case 13 for 4 weekly), giving 972.24, if its not an exact penny then round UP

3. Taxable pay is then your gross - freepay, so 1828.10 - 972.24 = 855.86 minus Pension contributions (note also that on Auto Enrolement you don't pay 5% of ALL earnings, its that over the LEL, so I get that to be 66.81), which gives 789.05

4. For the tax calculation however you only use the whole pounds so roundown to zero decimals = 789



5. As 789 is below the monthly threshold for higher rate (37,700 / 12 = 3141.66) this is all at 20% therefore 789 * 20% = 157.80 (round DOWN to 2 decimals)


ps why do you have a 1263L tax code? standard one is 1257L


Your NI is correct though

Please see attached.

One bit that I'm not certain of is the NI, from my own calculator I developed many years ago I get the same (roughly) as the Reference calculator you've used, the difference is based on there being one more pound in the calculation rather than the straight forward Pay - Primary Threshold calc, why however is the question....(I know its right but can't quite explain why if that makes sense?)