PAYE70025 - PAYE operation: aspects of PAYE operation - employer: tax tables
Tax Tables are available in more than one format so employers can
- Access them from the Basic PAYE Tools
Or
- Access them from the HMRC Website
Or
- Order them from the Employer Orderline
An employer will usually need
- Tables A - Pay Adjustment Tables
And either
- Tables B to D
Or
- Calculator Tables
Tables A - Pay Adjustment Tables
These tables show the weekly and monthly pay adjustment figures. They give you the correct figure of
- Free pay, where the code is a suffix code
Or
- Additional pay, where the code is a K code
Free pay is the total amount of pay an employee is allowed to receive free of tax up to (and including) the latest pay day. It is a proportion of the employee’s maximum tax allowance which is reflected in the code.
For example, the free pay for Week 1 is 1/52 of the maximum allowance of the code. Free pay for Week 2 is 2/52 and so on. Similarly, free pay for Month 1 is 1/12, Month 2 is 2/12 and so on.
Additional pay is an amount added to an employee's total pay to date on any pay day when a K code is used. A ‘K’ code is used to collect extra tax due from employees who have untaxed income (such as taxable benefits) which are not fully covered by allowances.
To use Tables A you simply
- Turn to the page corresponding to the appropriate week or month
- Find the code
- Read the pay adjustment figure
Tables A - codes of 501 or more
Tables A do not show pay adjustments for codes over 500. However the correct figure can be calculated by following the instructions given in the tables
- For codes between 501 and 1000 the instructions are given on each page of the tables themselves
- For codes over 1000 the instructions are given separately at the beginning of the tables
Tables B to D - Taxable Pay Tables
These tables are used to work out tax due on an employee's taxable pay on any given pay day. Taxable pay for a
- Suffix code is total pay to date less the free pay to date
- K code is total pay to date plus the additional pay to date
The tables explain the full manual method of calculating PAYE tax deductions.
Calculator Tables
These tables are a simpler alternative to Tables B to D, and explain how to calculate PAYE tax deductions using a calculator.
