Q: I have a query around PAYE for a new starter when they have only worked half of the pay period.
We pay on a fortnightly pay cycle, but a new starter has only worked 1 week for their first pay. In previous roles, I have always changed the taxable weeks to 1 so their PAYE deductions are correct. However, the payroll provider in my new role have said that this should remain as 2 weeks as we’re on a fortnightly cycle.
Are you please able to advise which process is correct? My concern is that if this is left as 2 weeks, the employee is being under-taxed and will end up with a tax bill.
A: This should be based the pay period on what is stated in the employment agreement, yes fortnightly. You can make the employee aware on the potential that they may have been under taxed but they must take responsibility for this and not payroll.