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I appear to have 2.
The one on my payslip says BR (basic rate)
The one on my crappy little private pension statement (of £88.85 a month) says K310.
Next simple questions. On a gross monthly pay of £841.83*, how much tax should I have paid?
On my measly pension of £89.85, how much tax should I pay?
*that's for 15.38 hrs a week, based on an annualised hours contract of 800 a year.
3 things that may be relevant...I received my 1st state pension on 12 Sept but reduced my hours from 1020 per year on 1st September. My total income is WELL below the 40% rate.
I think I may have to call the tax person.
IIRC a K code means that employer isn't taking into account your tax-free earnings as your other employer is already deducting enough to use up all of your tax-free earnings.
Yea, that doesn't seem right, unless you owe tax from underpaying in previous years. The basic 20% rate doesn't start until you earn about £13k/year. In this way, your tax code should be something like 1300L.
BR means 'basic rate' so ALL your income on your payslip is being taxed at 20% - HMRC probably don't realise you are only working part time.
K code is apparently if your pension is greater than the 13k allowance.
You can check the codes here:
https://www.gov.uk/check-income-tax-current-year
But you need to setup a Gateway ID.
Even if you add them both up, it doesn't go over the £13k threshold, so you shouldn't be paying anything (unless you owe them from previous years).
You should have a code on each income you receive (except your state pension and other state benefits). The State Pension is taxable income but they can't take tax from it so take it from another income.
The BR code just means they take the Basic Rate, which is 20% (if it were the Scottish basic of 21% it would be SBR). The K code works as a negative allowance - on that income you are taxed as if it were £3100pa more than it is.
So BR on your £841.83 would be £168.20, and K310 on £89.85 would be £69.64, except that the payroll may (I’m not sure if they must) limit the tax to 50%, in which case it would be £44.50 (assuming you ignore the pennies).
What you should be paying depends on how much State Pension you get.
You can have multiple tax codes.
EDIT - it's possible to have a different tax code for each income source.
It looks to me like your annual income is £11,180 (841+89), so you shouldn't pay any income tax at all. It's under the personal allowance of £12,750.
Sorry, K code is if your pension contributions are greater than the personal allowance.
https://www.burton-sweet.co.uk/what-is-a-k-tax-code/
So BR on your £841.83 would be £168.20, and K310 on £89.85 would be £69.64, except that the payroll may (I’m not sure if they must) limit the tax to 50%, in which case it would be £44.50 (assuming you ignore the pennies).
@pyranha You're just about spot on with the pension one. I got £44.92 net out of £88.95. However on the £841.83 I paid £276.92, even though it says BR on my payslip. I rang our payroll office but they just said speak to HMRC. Which I think I'll have to.
No way you should be paying that much tax on those earnings, unless you owe them from previous years.
No way you should be paying that much tax on those earnings, unless you owe them from previous years.
That's what I thought. I've worked for a local council for the past 5 years & the Prison Service before that so any tax should be accounted for & in order.
Funny how It's all gone wonky since I turned 66.
You should (and do) have your personal tax code applied to your private pension(s) because that's what you'll be paid, and taxed on, for life.
The BR is on your salary because any personal allowance will be on your pensions, however, this assumes that your income(s) reach/exceed the appropriate threshold(s) and that you'll stop working before you stop taking pension payments
As to the amounts, ring HMRC, the closer to opening time the better IME