Partnership and Matching - Tax Reduction

Post by **wacko74** » 06 Sep 2018, 18:01

So I've opted for the full amount, £23.07 per week, on a 36 hour week, one of my main reasons was the tax advantage.

So I'm rather dismayed and disappointed to see on my first week of it coming out that my tax has been reduced by a whole £1.40 (£34.60 to £33.20) and my NI by an equally underwhelming 75p! (£28.90 to £28.15)

Surely this can't be right?

Edit - Sorry I thought I'd posted this in the Shares Forum, can a mod move it?

arnold cheshire · Post by **arnold cheshire** » 06 Sep 2018, 18:09

Has 23 pound been taken from gross pay on the left hand side?

Post by **wacko74** » 06 Sep 2018, 18:23

Yes -£23.07

reedy · Post by **reedy** » 06 Sep 2018, 18:36

Mine was spot on...£15 less take home pay.

Post by **westy23** » 06 Sep 2018, 20:18

Paid £23.07 and take home pay reduced by £15.70.

koolishy67 · Post by **koolishy67** » 07 Sep 2018, 11:39

Paid £14 a week getting £9.48 less from my pay

Post by **wacko74** » 07 Sep 2018, 17:50

Thanks for the replies.

So it looks like mine has been messed up somewhere along the line.

Does anyone know who do I contact to try and sort it? HR? Payroll? Share plan website? or HMRC?

arnold cheshire · Post by **arnold cheshire** » 07 Sep 2018, 18:59

It might even out next week

Duran · Post by **Duran** » 08 Sep 2018, 13:03

wacko74 wrote:Thanks for the replies.

So it looks like mine has been messed up somewhere along the line.

Does anyone know who do I contact to try and sort it? HR? Payroll? Share plan website? or HMRC?

Wacko. It hasn't been messed up. £23.07 has been taken off your gross pay before tax and insurance. So the cost to you would be just under £16 in real terms.

arnold cheshire · Post by **arnold cheshire** » 08 Sep 2018, 17:45

How much now is your gross pay total?

Post by **wacko74** » 09 Sep 2018, 08:44

Thanks again for the replies, numbers really aren't my strong point so I'm struggling to get my head round this!

Here are the figures for 2 weeks pre and post shares...

36 hours - Gross, £402 (minus £20 pension)
Deductions - tax £34.60 NI- £28.90 CWU- £2.55
Net pay £336

37 hours (so 1 hour more) - Gross £392 (minus £20 pension and £23 P&M Scheme)
Deductions - Tax £33.20 NI- 28.15 CWU £2.55
Net pay £332

(Just to be clear, I'm on 30 hours, the 6 and 7 hours are overtime at SSPR)

It feels a bit like the impossible conundrum to me, I was expecting to see my tax noticeably reduced but it hasn't been?

Post by **wacko74** » 11 Sep 2018, 14:21

Bump ^^^ Do those figures look right?

Cos I still can't figure them out and would have expected to see a bigger reduction in tax?

mickeymacca · Post by **mickeymacca** » 12 Sep 2018, 16:12

wacko74 wrote:Thanks again for the replies, numbers really aren't my strong point so I'm struggling to get my head round this!

Here are the figures for 2 weeks pre and post shares...

36 hours - Gross, £402 (minus £20 pension)
Deductions - tax £34.60 NI- £28.90 CWU- £2.55
Net pay £336

37 hours (so 1 hour more) - Gross £392 (minus £20 pension and £23 P&M Scheme)
Deductions - Tax £33.20 NI- 28.15 CWU £2.55
Net pay £332

(Just to be clear, I'm on 30 hours, the 6 and 7 hours are overtime at SSPR)

It feels a bit like the impossible conundrum to me, I was expecting to see my tax noticeably reduced but it hasn't been?

Hi Wacko, no the tax you have paid won't go down significantly. As others have said if your take home pay is only around £15 less 'post share offer' then that sounds correct.

Your tax free benefit is due to the purchase of the shares being deducted (like your penison) from your gross pay, before tax and NI deductions are assessed/taken. So the amount of tax and NI that you pay is calculated from a lower sum from £392 rather than from £402 (would have been about £380 had you not done the 1 hour of overtime). If you take off that 1 hour of ot your net would be about £322 so the difference between your weekly pay is only about £15, like the other posters. However, you have £23 worth of shares, which have only affected your wages by £15, which is where you can see where the tax savings are visible. So although you tax deductions have gone down a little on your wage slip (but that is kind of irrelevant) the real tax saving is that you have been allowed to buy something with money that is not assessed for tax or NI.

I hope this makes sense, I've had a long day

*figures are approx

Post by **wacko74** » 13 Sep 2018, 20:28

Thanks for the reply, yes I suppose the figures do make sense in so far as about £15 less for £23 of shares, I still dont fully understand just how it works out given that my tax has effectively stayed the same, but I've never really understood my tax, I seem to pay about 50% more tax when doing about 6 hours overtime above a flat 30 hour week!

mickeymacca · Post by **mickeymacca** » 13 Sep 2018, 22:16

wacko74 wrote:Thanks for the reply, yes I suppose the figures do make sense in so far as about £15 less for £23 of shares, I still dont fully understand just how it works out given that my tax has effectively stayed the same, but I've never really understood my tax, I seem to pay about 50% more tax when doing about 6 hours overtime above a flat 30 hour week!

thats kind of how the tax system works, your first £225 odd money earnt is all tax free you only pay NI (which I think is 11%) this is your tax free allowance (your tax code which is 11850 currently for your average joe) everything after that you pay 20% tax and the 11% NI up to the next band (which we ain't gonna reach on posties wages, its about 45k). So yeh, the more you earn the more tax you actually pay and the less it is offset by your tax free allowance. However your shares are taken out of this assesment, which as they would have been money earned that is over the £225 weekly tax free allowance, you would have been liable to pay the 31% which all earnings over this amount have to pay, hence you have saved 31%. If you only earned £100 a week you would not have made any tax saving on the share purchase except for the 11% NI liability as you do not exceed the £225 (£11850 annual ) personal tax free allowance.

hope this is clear, although I've had a glass of wine so apologies if its confused you more!