Simple old payroll systems would calculate it that way yes, but these days it should be simple enough to calculate it at source as a backdated annual increment as it is... However, if it is done incorrectly (as we can expect!) then we can sort it directly with the inland revenue, resulting in a cheque for the overpayment(which won't be a huge amount) but worst case with an adjusted tax code for the subsequent year... Far from ideal but we shouldn't end up out of pocket.