HELP NEEDED! Confused with Tax Codes!!?!?!?!?

Bizzle

I wonder if anyone can help me. I started working for my current company in September of last year. For the first 6 months my tax code was 561T M1, and is currently just 561T.

I earn 40000 a year, which works out at 3333.00 a month. I pay around 573 in PAYE tax and 316 in NI. As painful as that is, it seems about right, working out at around 26% of my NET wage.

My confusion comes when I get a bonus, which I receive every 4 months and is usually 3333.33. In the month I received this amount I was taxed 1899.20 in PAYE tax, and 350 in NI.

Does this seem correct? seems like a huge jump!

Thanks

Golden_Anemone

If your bonus is on top of your normal monthly pay then you will have no additional allowance before tax and NI are deducted. This means you will pay 40% on the full amount of the bonus. I work that out as 1333.33 and if you add your normal monthly tax of 573, the amount you quote is about right.

vicshippers

You could work it out on listentotaxman.com - enter your total salary including bonus, it will then give you a net annual wage.

Deduct 12 x your normal non-bonus net wage, the figure you are left with is the extra net cash from the bonus.

I think I may have made that seem more complicated than it is...hope you know what I mean!

Oh BTW - I never look at the tax and NI box, I just focus on the numbers that hit my account :beer: