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The Jargon Buster

Posted on 1st November 2018
Accounting / Business / CIS / payroll

The Jargon Destroyer

‘Have you got your P60 and P45?’ There might be a blank look on your face and it’s hardly surprising. There are far too many buzz words and far too much jargon being thrown around. But don’t worry, we’ve got a jargon destroyer of a post for you this week.

P45

When you leave and have said your goodbyes, you’ll get one of these from your old employer. It shows how much you earned, how much tax you have paid and it’s given to your new employer when you start with them.

P60

A bit like the P45, but it only comes once a year. You’ll get this from your employer – it’ll show you how much you’ve earned and the taxes you’ve paid this year.

P11D

Your employer files this for every worker that is given expenses or benefits (including pay) not paid through payroll.

PAYE

Pay as you earn is the way that your employer takes tax and national insurance from your pay before it is given to you. It saves you time and mistakes working it out yourselves.

SSP

Statutory sick pay is when you’re off work for 4 or more days – you’re given sick pay, even if your employer doesn’t provide enhanced sick pay.

Tax Codes

These are codes that show the tax-free part of your earnings. It’s used by the HMRC to calculate how much to tax you.

W1/M1

This tax code means that you’re going to be emergency taxed – it’s a good idea to chat to your employer to find out why.

Gross Pay

This is your pay before anything like national insurance or tax has been taken off.

Net Pay

The amount of money that you will receive in your bank account once everything (tax, NI) has been deducted.

National Insurance

NI or National Insurance is taken from your pay and it goes towards paying for things like the NHS.

CIS

CIS or Construction Industry Scheme is a scheme that ensures sub-contractors and contractors are paying the correct amount of tax. Check our post out for more information.

 

Now you’ve digested our jargon destroyer you’ll be able to speak in code with your payroll guys and girls and understand what your payslip is telling you. Contact us to discuss how your agency can avoid the headache of payroll and save a great deal of time.

 


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