PAYE not being deducted from Employee

The allowances cover the tax year eg Apil 6 to April 5 each year

Hi Pete

I understand that the allowances cover the tax year, what I am asking is :

If the allowance is £12500 for the tax year in question

Does QB deduct no tax until the allowance is reached ie from April to whenever the £12500 allowance is reached the system won't deduct tax, and then when the £12500 is exceeded then tax is charged

OR

Does  the system split the £12500 over the tax year so that 1041.67 of the monthly salary isn't taxed and the balance is

You got it right, @JeanetteLeisegang.

QuickBooks will tax the allowance if it exceeds the £12500 amount. And yes, the amount will be split. It is given in equal portion through the year. This way, your employee will receive the full allowance by the end of the tax year.

Furthermore, here are some great articles you can read to learn more bout payroll tax year changes in QuickBooks Desktop (QBDT):

1. Payroll Tax Year Changes 2019/2020
2. Preparing and running payroll year end 2019/20 for QuickBooks Desktop.

Let me know if there's anything else I can help you with. I'm always a post away. Have a wonderful day and keep safe!

Hi 

Payroll seems to be deducting PAYE before the tax free allowance is reached.  Is there a setting that needs to be added or adjusted so this is done correctly?

Hi, Jeremy008.

I'm here to help ensure the PAYE is deducting after the tax -free allowance in QuickBooks. You might want to double-check the deduction's set up if it's set to After-tax deduction. This way, it will calculate and deduct after the tax-free allowance.

Be sure to choose the correct tax tracking type to ensure that your information is accurate.

You might want to check these articles for more insights QuickBooks Desktop payroll processes:

Auto Enrolment for workplace pensions in QuickBooks Desktop

Employees and Payroll for QuickBooks Desktop

However, if you'd like to go through this over the phone, you can call our dedicated team who will be happy to assist you. Our contact details can be found here along with our opening hours.

I'll be around to help if you have any other concerns. Have a nice day!

Hi RoseMarjorieA

I am using quickbooks standard payroll online.  I don't think it has an option for anything like you have suggested.  I have set the tax calculation method to be cumulative which should take into account the personal allowance of 12500, but it doesn't. 

Hello Jeremy088, 

So have you set up the Employment allowance in your standard payroll and also can you please check that the employee setup and make sure you are not set to W1/M1 and that you're cumulative when you run the p32 report what do you see on there?

Can we ask as well what is your gross pay? As PAYE is calculated on anything over 1042 per month. 

Hi Ashleigh1

I do not have employment allowance on.  And it is set to cumulative.  When I run the P32 report I can see income tax being deducted.  

Gross pay to date is £3,076.  Monthly gross pay £1,538.  So far £230.40 has been calculated as income tax.