Why has my take-home pay decreased?

As a contractor, your pay is likely to go up and down depending on the work you’ve been doing. If you’ve noticed a decrease in take-home pay that you weren’t expecting, perhaps one of these reasons are behind it:

  • Your tax code has changed, giving you a lower tax-free personal allowance
  • You worked fewer hours or had a lower pay rate than usual
  • You’ve just had your first pay of a new tax year, are on a cumulative tax code and had periods without work in the last tax year. Your personal allowance had stacked up, meaning a higher portion of your income was tax-free recently. Your allowance resets at the start of the tax year, and you started paying more tax come April.
  • You claimed fewer expenses than usual