I am currently running a very small cleaning business. I am the director and the only employee on the books. I am also employed by the NHS as a second part-time job. I am currently trying to pay myself a small weekly wage however 50% is being deducted for PAYE, which seems too high when I would be in the lower tax bracket, even when both job's earnings are combined. My tax code is BR and NI category is J, which seems right considering what I have read up on the tax codes and NI categories. I have called HMRC and they said that the issue is with the accounting software.
For reference sake I am being paid a little over £1000 by the NHS and only looking to pay myself £150 a week for my cleaning work.
Does anybody have any suggestions how I can remedy this?
I have the same thing happening with one of my employees who has another job. Their tax code is 273T which has been updated from BR by HMRC. They are currently furloughed from their other job and has only earned just over £3k with them. They are well under the tax threshold limit as far as I can see.
Sorry for hopping on your post but I'm interested in a solution!
Thanks for getting back to us, PGW_Cleaning. Also, you are always welcome to join other threads that describes your concern, Phil2019.
PGW_Cleaning, you have entered C as the Tax code. This means that the income or pension is taxed using the rates in Wales.
For Phil2019, your employee's tax code is T. This means that the tax code includes other calculations to work out your Personal Allowance. You can see more of these tax codes through this link: Tax codes (UK).
When editing the employee information, you'll see more of these tax-related details under Tax information on this article: Edit employees in QuickBooks Online Standard Payroll (UK).
You might also find these additional references helpful:
In addition to that, I'd recommend consulting your accountant for further details in handling payroll tax codes. They can give you the best option on how to get this setup working in QuickBooks Online.
We'll be right here if you have additional queries.
My tax code is BR.
It is my starter declaration that is C.
The options are:
A - First job since 6 Apr 2020
B - Only job currently
C - Has another job or pension
So, C does seem like the right choice in my circumstances.
Thanks for getting back to us on this post - I'd be grateful if you could use the HMRC PAYE calculator linked here to check the exact figures for this period as a reference point, as these should match what we're seeing in QuickBooks.
Do you have the correct details of your pay-to-date for your employment with the NHS within your pay history settings, showing under 'Other employers have paid X since 6 April 2020'?
The HMRC PAYE calculator is showing my tax due at £30, which I would expect as this is 20% of the £150 a week I am looking to pay myself. However QuickBooks is still showing PAYE at £75, which is at 50%.
I have double checked the section other employers have paid section and these figures all appear to be correct.
The issue remains that I am being taxed at 50%, even though I am a standard tax rate payer for both jobs combined.
Thank you for your help, I am sure I am probably missing something glaringly obvious but I can't get my head around it.
I have attached the employee page, which I hope includes the first two points and subsequently a copy of the payslip.
Thank you for these screenshots, @PGW_Cleaning.
Allow me to step in for a moment and share with you some additional steps to isolate the issue.
For the time being, you can delete and recreate the paycheck. Before that, ensure that the information employee's information is all correct. This way, taxes are deducted accurately based on the employee's set up. For your guide, you can check out these articles:
To delete the employee's paycheck, use these links:
If the tax amount is still calculating 50%, I would suggest reaching out to our Support Team so a live representative can check and review the root cause of this behaviour securely. For the support's contact details, you can follow the instructions laid out under the QuickBooks Online Support link from this article: Contact QuickBooks products Support.
Please let me know if you need further assistance with this. I've got your back and am always happy to help. Thanks for reaching out, wishing you and your business all the best.