FAQ Home

4107. Why isn't my new employee paying any tax?.

Common reasons why this could occur:
1) You have not entered previous pay and tax data. A new employee normally provides a P45 which details previous pay and tax figures. Check to see that you have entered these figures into the system.
2) The tax was calculated incorrectly by their previous employer. The package uses figures entered from the P45 to calculate the current tax due. If the employee previously paid too much tax, because it was calculated incorrectly, the program adjusts the tax in the current pay period accordingly. This may even result in a tax refund.
3) The employee has been unemployed for a period of time, since tax is normally a cumulative calculation the tax free pay allowance for pay periods in which the employee did not receive a payment are carried forward. Check the date on the P45. Has there been a break in earnings?
4) If the employee's earnings are below their tax free pay allowance, they will not pay tax.