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Hi there,  assume one of your employee Dose not pay tax neither NI  work for you on 16 hours weekly equal to £560  monthly , and this person didn’t work for you for one day and you deduct £30 off her/his salary, which is the  correct format on the payslip to do ?

scenario one:

69.333 hours /month *£8.21.  =£560

deduction  1*30£.               =£30

net pay.       To pay                = £530£

According to this scenario If the  company issued to the employee  p45 later on after for 4 months  of work ,p45 will reflect the total GROSS paid it means if the employee work for 3 months as a full payment and only last month has been deducted from him/her of 30£ , the p45 still reflect the total amount of £560*4=2240£   

senario two:


Net to pay 530£

The p45 will reflect as;

3month of pay[3*560]+530=2210£

Total Net received from employer .

The employee  is not happy  in scenario one as  his p45 did reflect his actual amount received .

please advise which sect is correct issue p45 as gross of as net salary?

Thank you for taking time to read my question.




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17th May 2019 07:05

On the face of the facts presented, scenario 2 is correct.
The £30 would be deducted from the gross wage before any tax (if there were any) so the gross will be £530.

Thanks (0)
17th May 2019 07:41

If instead of recording the £30 as a ‘deduction’ record it as ‘-£30 pay’. Depending what software you’re using, you should be able to rename the ‘pay’ as eg ‘sick leave’ or whatever you want.

This will leave you with the correct pay amount.

Thanks (1)
to atleastisoundknowledgable...
21st May 2019 19:52

Thank you for your time, do you mean p45 must reflect the employee actual amount received assuming this person dose not pay any tax or ni

Thanks (0)
17th May 2019 08:50

Per scenario 1, your payslips show the number of hours worked and the gross pay for those hours (with a calculation that is wrong, but we'll gloss over that)

Wouldn't you just adjust the number of hours to that which was actually worked? That's surely the point of the pay being calculated based on an hourly rate?

Thanks (2)
17th May 2019 09:35

Since it is gross pay, it needs to show on their P45 as having been deducted before tax, so would reduce the amount of pay shown - why wouldn't it?

I'm very confused over the maths involved here though

Thanks (1)
17th May 2019 09:55

Whichever option you choose to show in on the employee's payslip is up to you, but the P45 must show only £2,210.

Explain to the employees that the P45 is a tax document and must show only the pay which has been taken into account for tax purposes. If he needs to show to someone else that his normal rate of pay is £560 per month he can show them his payslips. Alternatively you could give him a letter confirming his normal rate of pay was £560.

Thanks (1)
to tonycourt
21st May 2019 19:49

Thank you for your time, you mean p45 must reflect the employee actual amount received assuming this person dose not pay any tax or NI ,Scenario two would be the correct one?
And deductions should show as sick pay?

Thanks (0)
to Fatima Sab
21st May 2019 22:30

Scenario 2 is the right one.

There is no room on a P45 for details of deductions made from taxable pay - the right place for these is the payslip.

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to Fatima Sab
22nd May 2019 08:08

Fatima Sab wrote:

And deductions should show as sick pay?

Seriously, how can deductions show up as any kind of pay ?

Thanks (0)
17th May 2019 11:24

Scenario 1 wouldn't work if the employee earned enough to pay tax and NI. He'd be paying tax and NI on money he hadn't earned. He could be off work all month and pay tax on the money he would've earned if he'd turned up.

It's obviously wrong.

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