First job in the UK, am I paying enough tax?

I just completed my first month of employment at my first ever job in the UK.  I was paid last week and today a slip arrived with my payment details.

This month was prorated by a few days, but the slip says my base pay was £2,069.13, NIC deductions were £176.05, and tax paid this period was £39.80.


To me, that seems a bit low.  Before I got paid, I was using http://www.thesalarycalculator.co.uk/ to get an idea of what to expect my pay to be.  If I put my salary into there, my expected tax payment is closer to £350, not £39!

So can anyone tell if I am paying enough tax or not?  I don't want to be in a situation where I owe several thousand pounds next year to HMRC.

I just completed my first month of employment at my first ever job in the UK.  I was paid last week and today a slip arrived with my payment details.

This month was prorated by a few days, but the slip says my base pay was £2,069.13, NIC deductions were £176.05, and tax paid this period was £39.80.


To me, that seems a bit low.  Before I got paid, I was using http://www.thesalarycalculator.co.uk/ to get an idea of what to expect my pay to be.  If I put my salary into there, my expected tax payment is closer to £350, not £39!

So can anyone tell if I am paying enough tax or not?  I don't want to be in a situation where I owe several thousand pounds next year to HMRC.

Salary calculator works it out based on how much you'll earn in the whole tax year, you won't be working some of the tax year.  I'm not sure how they've worked out your tax though, you can earn abotu £7000 or something before you pay any tax but usually they spread it out I think.

It could be that you haven't earned enough yet to reach the tax threshold, or at least it hasn't been recognised in the system yet that you will be earning over the minimum threshold, so they have taxed you accordingly. What tax code is on your pay slip for this month?

Same thing happened to me when I started my new job last October... I hadn't yet received my P45 from my previous UK job (I'd left that job 2 weeks earlier), so I was taxed only about £40 as if I had not yet earned any money in the tax year. A few days later I did receive my P45 and gave it to HR... and the next month I they took nearly £400 in tax and NI, to make up for not taking enough the month before!

It could be that it will be rectified in your next pay cheque, or it might be worth talking to HR at your company to see if there's anything you or they need to do to make sure you're on the right tax code and are paying the correct amount of tax.

That's gonna hurt if it comes out next pay cheque.

Under tax code it says 747L Cum.  NI Code says A, for what it's worth.

That's gonna hurt if it comes out next pay cheque.

Under tax code it says 747L Cum.  NI Code says A, for what it's worth.

Sounds like you might be on the emergency tax code right now - the 2011/12 emergency tax code is 747L - which they usually put you on if HMRC doesn't have enough tax info on you yet to work out your correct tax code for the year (i.e. because you've only just started working in the UK).

More info on the emergency tax codes: http://www.hmrc.gov.uk/incometax/emergency-code.htm

From that page:

If you're put on a cumulative emergency tax code

You'll usually be put on a ‘cumulative’ emergency tax code if you've ticked Statement A on your P46 - telling your employer that this is your first job since the start of the tax year and you haven't been receiving any taxable pensions or state benefits.

How a cumulative emergency tax code might affect your wages

The code used in this way will give you your full tax-free Personal Allowance over the remainder of the tax year - that's because your employer can carry forward any tax-free allowance not used in the period before you started your job. (As you've only just started work HMRC assumes that you haven't yet used any of your tax-free Personal Allowance.)

Your tax should be about right at the end of the tax year.

Your best bet would probably be to talk to HR and find out how to get your correct tax code sorted out (you may need to call your tax office and talk to them).

747L isn't really an emergency tax code.  Even though they call it one!!  It is the normal full tax code for someone under 65 equating to 7475 of earnings in a tax year tax free.  Most people with simple tax affairs and no extra complications have a tax code of 747L.  So you may well find your tax code is correct at 747L.

As this is your first every job in the UK and your first pay cheque, you have already had 3 months of the tax year when you haven't earnt a bean.  So you have 3 month's tax allowance against one month's pay.

Your tax amount for this month of £39 looks spot on.  Expect your tax next month (August) to be as the salary calculator quoted though.