Tax taken from bonus

Marshyman · 17 May 2017 at 2:00PM

Hi all,

I'm looking for a bit of clarity on how and why I have been taxed different amounts on 2 identical bonuses I have received

The company I work for has just paid the last 6 monthly bonus (it is now changing to once every year) and I have been taxed much differently on the last 2 I have received (Nov 16 and May 17)

Il try to put as much detail as possible but let me know if you need anymore:

November 16: I was earning an annual basic salary of £29,435 and received a bonus of £5643. Tax code was 1028L. Total monthly income before tax £8095.92. Tax deducted £1447.60. NI deducted £439.58. Take home pay £6208.74

May 17: I am now earning an annual basic salary of £30,906 and received a bonus of £5643. Tax code is 1104L. Total monthly income before tax £8206.10. Tax deducted £2095.33 NI deducted £457.56. Take home pay £5,655.21

The next bonus i receive will be in June 18 so my earnings will be no where near the higher rate tax band for the remainder of this financial year

Does this mean I am due a tax rebate lump sum or over the remaining tax year months?

Thanks all, as I say if you need more info let me know

General_Grant · 17 May 2017 at 2:38PM

Without actually going through all the figures -

The November payment was more than half-way through the tax year so you had the benefit of more of your tax-free allowance

The May payment was only into the second month of the tax year so you had less of your allowance against which the payment would be set.

So over the rest of the year you will recoup what may be considered as over-payment of tax. It will sort itself out.

getmore4less · 17 May 2017 at 2:51PM

Not just the tax free allowance there is the 20% allowance as well that will only have 1or2 months worth depend on if this is a month 1 or month 2 payment.

if this was month 2 it will look like earnings for the year will be around
((8205-5643)*2 + 5643)*6 = £64602.

Marshyman · 17 May 2017 at 5:06PM

Ok thanks both, it is month 2 and YTD earnings are £10,813

Is it likely that I will have to wait until the end of the year before a rebate or will it be adjusted monthly once I continue to receive the basic income only each month of £2565 gross

pioneer22 · 17 May 2017 at 6:25PM

Marshyman wrote: »

Ok thanks both, it is month 2 and YTD earnings are £10,813

Is it likely that I will have to wait until the end of the year before a rebate or will it be adjusted monthly once I continue to receive the basic income only each month of £2565 gross

It may adjust and will adjust the amount of tax you pay. Or more likely stay the same and you will need to claim it back like a rebate.

getmore4less · 17 May 2017 at 6:31PM

higher rate kicks in when target is over £45k
As long as you are PAYE and on the right tax code it sorts itself out(using some rounding)

month, total for year, target for year

3 £13,200, £52,800
4 £15,800, £47,400
5 £13,300, £31,900

All sorted by August(but watch the take home it will go down in Aug

agrinnall · 17 May 2017 at 7:20PM

pioneer22 wrote: »

It may adjust and will adjust the amount of tax you pay. Or more likely stay the same and you will need to claim it back like a rebate.

The bit I have bolded is wrong, there are almost no circumstances in which someone on PAYE would not have the additional tax paid in month 2 of the tax year automatically returned over the following months.

jamesperrett · 18 May 2017 at 9:35PM

I've had this happen a few times - you'll find that you pay less tax in the subsequent months of the tax year which will give your take home pay a nice boost.

Marshyman · 19 May 2017 at 1:27AM

Thank you all, il wait to see what next months pay packet looks like!

Tax taken from bonus

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