Tax is calculated based on an individual’s tax code. This will have either been taken directly from the P45 that was provided by their previous employer, or determined by the box ticked on the HMRC New Stater Checklist they completed when they started work for you. If they have stated they have another job elsewhere when completing the New Stater Checklist, they will be put onto a code that taxes them at a rate of 20% on all earnings. This should be rectified by the second payroll if incorrect, as HMRC should notify electronically via payroll.
If tax was not deducted previously but there is now a deduction, the employee may have received a change in tax code from HMRC. If this is the case the employee will need to speak to HMRC to find out why their tax code has changed. The tax code used will be shown on their payslip. A standard tax code for 2015-16 is 1060L.
National Insurance is deducted in 2015-16 when an employee earns more than £155.00 per week or £672.00 per month. This is called the Primary Threshold. National Insurance is calculated on each individual pay period, so if you have paid a bonus to your employee that takes them over the Primary Threshold there will be an NI deducted made, but if no bonus is paid the following pay period no deduction will be made.
