Dumb Income Tax questions

notmypants

Hey, hopefully, someone has some insight and appreciate any help in advance.

My partner earns 38960/year. She has a single person tax credit of 3300

Gross income 37,316 after pension contribution.

No other income, relief.

Her net monthly income should be 2,492 but she comes out with 2234.

The discrepancy is with her PAYE. She is paying 732.21 but I don't know why?
I pay less but earn more than her.

Her HR Department says everything is fine.

Any thoughts on this?

notmypants

apologies. May have posted this in the wrong section*

Riskymove

http://taxcalc.ie/budget-2018/

use this

namenotavailablE

Essentially, the PAYE is not correct based on the information you provide (I'm assuming that she has the typical standard rate band of €34550- you might confirm that). Could you check her tax credits certificate to verify the details- perhaps the credits of €3300 are being reduced to recover prior year under-payments or she's on some different standard rate band?

Here's what my spreadsheet shows based on the data provided (and it tallies with your own expectation of net):

notmypants

This is what I thought.

Her HR Dept have shared a breakdown with her but I can't actually make sense and it still looks like she's paying more tax than she should be.

Breakdown
Tax Credit

namenotavailablE

OK- the screenshot provided by HR shows that she changed to her current job at some stage during 2018.

It would seem that she probably wasn't having enough tax deducted in that previous job (she earned €16205 in it) and is now basically 'catching up'.

The way tax is calculated is you look at year-to-date earnings, year-to-date standard rate band and year-to-date tax credits. She has been correctly granted a YTD standard rate band of €20154 [calculated as the annual standard rate band of €34550*7 months/12 months] and the correct YTD tax credits of €1925 [calculated as annual tax credits of €3300*7 months / 12 months].
So- HR are indeed correctly calculating her gross tax liability at the various rates (that's the sum of €4030 and €494) and the net after deducting €1925 YTD credits is also correct.

The only figure I can't say anything about (but I suspect that they are correct as HR seems to know what they are doing) is the YTD tax value of €1867- part of that is from her prior job and would be on her P45. Part of it is from her current job.

Ultimately, when things balance out, she will be back to the values as per my screenshot above. It won't be a permanent €732 PAYE deduction.

notmypants

namenotavailabl wrote: »

It won't be a permanent €732 PAYE deduction.

Awesome! Thanks for that. I think this is likely why I couldn't figure it out. With that rate of tax, she was exceeding the annual tax rate I had calculated.

I really appreciate the help.