Paye question month advance

jonevin

Hi I'm hoping someone can answer this for me as I can't find it using google

We are paid weekly at the moment and our company is changing us to monthly

They have agreed to give us three weeks wages as an advance and we repay it to them over a few months to assist us with the change over

It will work like this paid weekly as normal up until the 25th of the month and then on 25th we will get one full month minus the advance repayment

I will be paying tax on the weekly pay and then paying tax on the monthly lump sum will I have overpaid tax then?

I will also have to pay back my employer at full rate if you know what I mean

I'm so confused

Shane732

jonevin wrote: »

Hi I'm hoping someone can answer this for me as I can't find it using google

We are paid weekly at the moment and our company is changing us to monthly

They have agreed to give us three weeks wages as an advance and we repay it to them over a few months to assist us with the change over

It will work like this paid weekly as normal up until the 25th of the month and then on 25th we will get one full month minus the advance repayment

I will be paying tax on the weekly pay and then paying tax on the monthly lump sum will I have overpaid tax then?

I will also have to pay back my employer at full rate if you know what I mean

I'm so confused

It really depends on how the employer works it. The employer may treat it as a loan to you. In such circumstances the employer should charge BIK on the interest free loan. The other option would be that you pay tax on whatever you get now and then your income is reduced over the next few month until the advance you got is cleared.

jonevin

Thanks very much I'm checking this with my hr dept