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matty007
Level 1

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Hi,

 

I have phoned Quickbooks regarding this before and thought I was given sound advice, but I really now don't think I was.

 

I started paying myself and my shareholder via Quickbooks in April. Even on the first payslip a small amount of PayE and NI was deducted from my shareholder, but nothing from myself. Despite paying myself over £240 per week. This progressed for many weeks and asforementioned, I called Quickbooks. They explained to me that because I was a director, nothing would be deducted until after I had been paid over £8,000 (can't remember the exact amount). At first I accepted this, and carried on. However, after much reading, I discovered that this applied to NI, and not PayE. Director's PayE is calculated in the same way as a normal employee. So surely now I've paid myself over £3,000 over the last three month SOME paye should be being taken?

 

I notice that if I put in a outlandish pay amount like £5,000 for the week, it does start taking PayE and NI. But something is obviously very wrong.

 

I am quite okay with most buisness matters but I really should have researched the details of payroll sooner and realised something was amiss rather than 100% trusting what I was told by Quickbooks support. Evidently I'm going to be hit by a largeish tax underpayment from HMRC but would just be happy if someone could advise me on why it's not calculating properly, and how to fix it, before a even bigger tax hole is dug for myself. All details are correct such as start date, NI Number etc so I'm really baffled as to why this is happening for me, when my other employee seems uneffected.

 

Thank you

8 REPLIES 8
Anonymous
Not applicable

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Hi matty007,

 

Thank you for contacting the Community.

 

Yes, when you are set up as a director you have to earn £8,424 (for tax year 2018/19) before being deducted for National Insurance. However, your PAYE is calculated based on your tax code, tax basis and how much you have earned. For example, if your tax code is 1185L you can earn £11,850 before being deducted for tax depending if you are on Cumulative or Week 1/Month 1.

 

If you are unsure which tax code or tax basis you should be on I would recommend to contact HMRC about this.

 

Please let me know if there is anything else I can help with. Smiley Happy

 

matty007
Level 1

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Thank you for the prompt reply Caryl. 

 

I am am on the typical 1185L tax code and starting paying myself from payroll at the very beginning of the new tax year. So obviously all allowances would be set as new. I am on the cumulative pay type, the same as my other employee 

 

But obviously Tax is taken on a payslip to payslip basis rather than my director NI which is only calculated once I’ve passed the £8,000+ threshold. 

 

Surely given that I have been paying myself a average of £250 per week, some PAYE should have been deducted from my pay. A fairly small amount granted, but something, surely? 

 

On two occasions now I have paid myself £300+ a week and still zero tax has been taken. 

matty007
Level 1

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Thank you for the prompt reply Caryl. 

 

I am am on the typical 1185L tax code and starting paying myself from payroll at the very beginning of the new tax year. So obviously all allowances would be set as new. I am on the cumulative pay type, the same as my other employee 

 

But obviously Tax is taken on a payslip to payslip basis rather than my director NI which is only calculated once I’ve passed the £8,000+ threshold. 

 

Surely given that I have been paying myself a average of £250 per week, some PAYE should have been deducted from my pay. A fairly small amount granted, but something, surely? 

 

On two occasions now I have paid myself £300+ a week and still zero tax has been taken. 

 

How can it be that my other employee has the exact same tax code as me, was started on payroll just after the new tax year, and is paid roughly the same, is having tax deducted, but I am not? 

Anonymous
Not applicable

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Hi matty007,

 

Thank you for getting back in touch.

 

Can I ask if this is a monthly or weekly payroll? And also whether you are using QuickBooks Online Payroll or PaySuite to run your payroll?

 

Just so I can replicate this on my side.

 

Thanks, Carly. Smiley Happy

matty007
Level 1

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Hi Carly. 

 

It is a weekly payroll and I am using Online payroll. 

 

Thank you. 

AshH
QuickBooks Team

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Hi Matty007.

 

Thanks for getting back to us. I've just tried to recreate this on my own system based on the information you have given me and I am having tax deducted from the total. Would I just be able to confirm a couple of things, is your tax basis on Cumulative or Week 1/ Month 1 and do you have any year to date/ pay history figures.

 

I've also done a check on the thresholds and based on the paying yourself an average of £250 per month and you should still be having small amount of tax taken each period.

 

Let me know and I will be back in touch Smiley Happy

 

 

matty007
Level 1

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

 


@AshH wrote:

Hi Matty007.

 

Thanks for getting back to us. I've just tried to recreate this on my own system based on the information you have given me and I am having tax deducted from the total. Would I just be able to confirm a couple of things, is your tax basis on Cumulative or Week 1/ Month 1 and do you have any year to date/ pay history figures.

 

I've also done a check on the thresholds and based on the paying yourself an average of £250 per month and you should still be having small amount of tax taken each period.

 

Let me know and I will be back in touch Smiley Happy

 

 


Thanks Ash. 

 

I am on cumulative and have paid myself £3,280 since the start of the new tax year in April. (That was the first time I paid myself through Payroll for this company, and nothing before) 

 

Thank you

Anonymous
Not applicable

Quickbooks Online Payroll Not Deducting PayE From Director Payslip

Hi matty007,

 

That is strange. I would recommend to visit our contact page and give us a call about this so we can get to the bottom of what is happening.

 

Please let me know if there is anything else I can help with.

 

 

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