Receiving bonus and commission tax

LondonGirl08

Hi everybody.

I work in advertising and last month I hit my targets and did a bit more. I worked out that I earned around £260 extra in bonus and commission.

I was just wondering if this is taxed and NIed at the standard rate? My take home wage before tax is around £1,375 and with this bonus it makes it £1,635.

Added into this I start paying back my student loan this month and according to the tax calculator my bonus means that my student loan repayments are bumped up a whopping £25 per month from a mere £11.

Does anybody know if this is right?

Mikeyorks

Tax and NI at the standard rate ..... as you're below the threshold at which 40% tax might bite on a bonus.

Student Loan ..... yes, that's charged at 9% above £15kpa. Unfortunately it's non-cumulative so the bonus will have a direct effect on what you pay in a 'bumper' month.

theculverhouses

I know it doesn't apply in this instance but worth remembering is that where you pay exceeds £844 per week (if you're paid monthly do your monthly salary x 52 / 12) then you get NIC'd at 1%. So if you are normally paid £3,500 per month before tax and in one month get a bonus of £5,000 then some of it would be at 1%.

NIC is not cumulative whereas tax is so the NIC you pay depends on your earnings that month/week.

There are different rules for directors of companies where they can be cumulative but this doesn't apply to most people out there I guess.

Cheers
Tim

CLAPTON

on your extra £260
you pay
20% tax i.e. £52
11% NI i.e. £28.6.. assuming you are not contracted out of the second state pension (9.4% otherwise.)
9% SLC i.e. £23.4 .. SLC is rounded down to the nearest pound.

so your marginal rate of deduction is 40% (it puts into perspective all that fuss about people paying 50% on salary over £150,000)

PS the usual meaning of 'take home pay' is that after all deductions and not before deductions.