Wrong Calculation on Income tax & P60

Question

Please assist me with this Income tax question. For the financial year 18-19, a company paid a starting salary of £ 41,671.80 and gave a pay rise of 9.2 percent from 1st Oct 2018 which makes it 45,452.50.

However, the total money transferred by the company to the bank for the financial year 18/19 is just £ 31,795.41 and it does not reflect the pay rise given because net pay for salary 41,671.80 is £31,481.50.

P60 End of Year Certificate 2018-19 given by the company states the salary to be £43,335.49 and Net wage for this is £ 32,612.81, this was not transferred. How did they come up with this number

Can you please tell me if the company has made the mistake of not implementing the given pay rise in the financial year 18-19 and also what should have been transferred(Net wage) to my bank account.

Please note, I do not have any student loans. I appreciate your time in reading this post and I wait for your advice.

Answer 1

Did you opt out of pension auto-enrolment? If you didn’t, then you should expect to have had 2.4% of your salary paid into a pension and not paid to you, which seems to be about the size of the discrepancy. It will be 4% in the current tax year.

Answer 2

Your figure of £45,452.50 for the post-raise gross seems wrong, and when you get paid, and what period of employment that covers, could account for the other differences.

Doing some "back of an envelope" calculations: if you started FY18-19 on £41,671.80 gross, then that is £3,472.65 per month. A 9.2% rise from 1st October takes this to £3,792.13 per month. Six months of the former (April to September) and six months of the latter (October to March) comes to £43,588.70 which more closely matches the figure on your P60 (£43,335.49). The difference could be down to what date you get paid, and exactly what period it covers. For example, if you get paid on the 15th of the month, that might cover the 15th of the previous month to the 14th of the current month, or it might cover the whole of the previous calendar month. And, as Mike Scott suggests in his answer, workplace pension payments may also make a difference.

Similarly, the difference between £31,795.41 (banked) and £32,612.81 (P60 net) could also be down to what period your salary payment covers. It's quite possible that the 12 salary payments from April 2018 through to March 2019 cover March (of the previous FY), six months at the old rate (April to September) and only five months at the new rate (October to February). Your pay for March 2019 (at the new rate) would be included in the P60's figure, but might not appear in your bank until the April 2019 payment.