The sudden change in the PAYE deduction from a positive amount to a negative amount for an employee indicates a change in the employee's tax code, cumulative tax status, or a significant system adjustment, Tracy. I'll elaborate on this in detail below.
This variation, especially the negative amount of -0.42k, means that the employee received a tax refund in the payroll period. It likely happens when the year-to-date (YTD) tax period is determined to be too high for the employee's current pay and tax code. Although we can verify how QuickBooks Online calculates this, it's complex because PAYE in the UK is calculated on a cumulative basis unless the W1/M1 applies.
When the code is W1/M1, the tax is calculated based only on the current month's pay, without considering the YTD earnings or tax paid. Upon seeing the refund, it is likely to change from W1/M1 to a cumulative code. The change you observed is likely an automatic correction done by the payroll system after receiving an update from the HMRC, resulting in a necessary tax refund to the employee.
To confirm these changes and verify if the employee really received a tax refund, I recommend contacting our Customer Support Team so they can assist you in checking the employee's tax codes on their payslips that trigger these adjustments. Here's how you can connect with them:
- Click the Help (?) icon.
- Scroll down to select the Contact Us button and follow the prompts.
- You can request a callback or start a live chat with an expert.
Please ensure you check their available hours so your concerns can be handled promptly.
If there's anything else I can do to assist you with payroll queries, you can reach out to the Community at any time. We'll be standing by for your response.
