Pay periods not fully aligned with the tax year
Pay periods not fully aligned with the tax year
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omniflow

Original Poster:

3,641 posts

175 months

Sunday 3rd March 2024
quotequote all
I have a zero hours minimum wage job where I'm paid by the hour, but I'm paid monthly.

Around the end of the tax year, my pay periods look like this:

19th Feb - 17th March - Paid on 25th March - Pay period 12
18th March - 14th April - Paid on 25th April - Pay period 1 for 24/25 tax year.

For working out how much to take from my pension without paying 40% tax, should I be only worrying about any earnings during pay period 12, or do I need to worry about most of the earning in pay period 1 for 24/25?

My current thinking is that the 23/24 tax year ends with pay period 12, and any earnings from 18th March -> 5th April count as being earned in the 24/25 tax year - although I'm not 100% comfortable with that.

OutInTheShed

13,355 posts

50 months

Sunday 3rd March 2024
quotequote all
The HMRC.gov.uk website is pretty good on most things.
What happened at the end of last year?

The rules do seem to change from time to time, I think you used to be able to make a pension contribution in April and carry it back to Mar?

Countdown

47,753 posts

220 months

Sunday 3rd March 2024
quotequote all
You only need to worry about payments up to M12 or W52/W53.

Technically most people are affected by this issue; the tax year ends on 5th April but the whole of Aprils salary gets taxed in the following year

Ham_and_Jam

3,421 posts

121 months

Sunday 3rd March 2024
quotequote all
It doesn’t matter when you worked, only the date it was paid.

With monthly pay you will be paid 12 times annually, the overlapping of actual hours worked in each tax year is irrelevant, and is the same for virtually everyone.

omniflow

Original Poster:

3,641 posts

175 months

Monday 4th March 2024
quotequote all
Thanks all. I was overthinking it.