Lieu vs Double Pay

LouisPlatt

I am due to be working this bank holiday 'weekend' and have yet to decide if I would like lieu (paid holiday for the same amount of hours as I have put in on that day) or double pay (paid double my usual amount) - generally what do people here choose if they are attempting to pay off a debt? Will I be taxed more for choosing double pay, if so will I be better off choosing lieu?

grumbler

LouisPlatt wrote:

Will I be taxed more for choosing double pay...

You will be charged extra tax on extra money only if your annual income is very close to one of the thresholds: http://www.hmrc.gov.uk/rates/it.htm. For current tax year these thresholds are:

£4895

£4895+£2020=£6915
£4895+£31400=£36295

For example, if your regular annual income is exactly £6915 you pay 10% tax on £2020 and 22% tax on all extra income.

angelica

Grumbler, you are quoting old thresholds.

From the same web-page for the tax year 2005-06 (06/04/05-05/04/06) thresholds are

10% 0-2,090 (£4,895+£2,090=£6,985)
22% 2.090-32,400 (above £6,985 but below £37,295)

Which means if your annual salary £10,000 , you do not pay anything on the first £4,895, pay 10% on next £2,090 and 22% on the rest (£3,015).

As grumbler said your tax charge will be higher only if your salary is on the border of thresholds otherwise your normal tax rate will apply.

Lorian

LouisPlatt wrote:

I am due to be working this bank holiday 'weekend' and have yet to decide if I would like lieu (paid holiday for the same amount of hours as I have put in on that day) or double pay (paid double my usual amount) - generally what do people here choose if they are attempting to pay off a debt? Will I be taxed more for choosing double pay, if so will I be better off choosing lieu?

If you goal is debt repayment then the extra tax you pay is almost irrelevant. If you take the time in lieu you get the same pay in your pay packet as if you did no overtime. If you take the double pay then you get extra money.

Xbigman

When I was in pay-off mode I went for every bit of overtime, double time and holiday trade in I could get. Take the money.
Regards




X

empfun

I concur with Xbigman but keep in mind no two lives are the same. Differing circumstances and such.

I'll take money anytime, I can enjoy a break when I'm dead and buried.

wayne

take the time off.why give gordon brown anymore than you do now?i take the time off every time coz i follow the saying "you work to live not live to work".

weedav

I work as shift system for a workplace that is open 17 hours a day 365 days a year. Therefore we all have to work Xmas or New Year (

This year I was on a weird shift pattern that meant I worked Christmas Eve and Christmas Day, then had Boxing Day and the 27th off. This was a bummer really because I missed out on these two double time days and as my family is in Edinburgh (I work in London) I didn't really have anything to do anyway. Luckily I managed to get these shifts as overtime, which means triple!! I'm working to pay off my debts so that I can soon "work to live not live to work!" - a short burst of overtime shifts makes that day come a little faster.

Other reasons for overtime are 1) it pays off your student loan quicker if you pay it back on the new via tax system. 2) All those hours working are hours you ain't spending cash!

pandas66

Just a quickie, if your claiming tax allowances and are close to the top end of gross salary, you may find it takes you over and therefore get it taken off you. Then take it as in leiu, that what I do now. I have done overtime in school holidays and its mounted up, I put some in my pension (tax free) and some taken in as shopping days for chrimbo and when we were quieter at work.

[Deleted User]

If you need the money take the money - otherwise enjoy the day off.

redux

I'd have expected double-time and a lieu day.