Taxed 32% on extra pay?
kmb500
Posts: 656 Forumite
in Cutting tax
Hi,
I earn £1821.83 per month which by my calculation is £21861.96 salary per year. I did some extra work this month and got paid £331.20 extra for it. But I got my payslip and the tax seems like a lot. I got taxed £415.56. I won't be earning anything else for the rest of the year so that would make my 2017 earnings to be £22193.16.
I don't know normally what my tax is because I was paying £100 of my earnings on pension but I have just opted out so this is the first pay slip with no pension deduction. But judging by MSE calculator I should be paying £173 income tax and £137 national insurance. So now paying £238.80 income tax and £176.76 NI seems very high!
I earned £331.20 extra but got taxed £105.56 more which is 31.8% tax. I thought the tax rate is 20%.
Can anyone make sense of this?
I earn £1821.83 per month which by my calculation is £21861.96 salary per year. I did some extra work this month and got paid £331.20 extra for it. But I got my payslip and the tax seems like a lot. I got taxed £415.56. I won't be earning anything else for the rest of the year so that would make my 2017 earnings to be £22193.16.
I don't know normally what my tax is because I was paying £100 of my earnings on pension but I have just opted out so this is the first pay slip with no pension deduction. But judging by MSE calculator I should be paying £173 income tax and £137 national insurance. So now paying £238.80 income tax and £176.76 NI seems very high!
I earned £331.20 extra but got taxed £105.56 more which is 31.8% tax. I thought the tax rate is 20%.
Can anyone make sense of this?
0
Comments
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rather than explain (again) how income tax, national insurance and the personal allowance all come together to leave you with a net pay amount please read:
https://www.moneyadviceservice.org.uk/en/articles/understanding-your-payslip
and the links in it on how tax is deducted, eg:
https://www.moneyadviceservice.org.uk/en/articles/tax-and-national-insurance-deductions
and how pension deductions impact the above0 -
As has been said your personal tax free allowance is used up against your regular monthly salary. Any extra work/overtime will then attract 20% tax and 12% NIC.0
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thanks
I looked up all the tax calculations and yeah I can see that the basic tax rate is 32% that's crazy! its expensive enough to live in this country as it is, anyway thank you for the help, I understand it more now.0 -
thanks
I looked up all the tax calculations and yeah I can see that the basic tax rate is 32% that's crazy! its expensive enough to live in this country as it is, anyway thank you for the help, I understand it more now.
Compared to many other countries, UK rates of taxation aren't that high.
https://www.theguardian.com/money/2017/may/27/tax-britons-pay-europe-australia-us0 -
thanks
I looked up all the tax calculations and yeah I can see that the basic tax rate is 32% that's crazy! its expensive enough to live in this country as it is, anyway thank you for the help, I understand it more now.
No it isn’t. Just returned from the US and the pool cleaner has to pay $700 per month just for healthcare insurance. We have it so good in the UK.0 -
worried_jim wrote: »No it isn’t. Just returned from the US and the pool cleaner has to pay $700 per month just for healthcare insurance. We have it so good in the UK.
I went to America last month and in the town we were in, I looked in the window of an estate agent and there were very nice houses under £100,000 and plenty of ones under £50K!0 -
I went to America last month and in the town we were in, I looked in the window of an estate agent and there were very nice houses under £100,000 and plenty of ones under £50K!
This is true! Our 4 bed house was the same price as the 2 bed flat I live in. However, I am guessing your £600 pm room is close to London so might not be a like for like comparison.
Why did you cancel your pension? Massive mistake, please reinstate ASAP, compounded interest will work wonders for you.0
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