We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

how much?

Options
How much can I earn per year without going into the 40% tax bracket, my tax code is 647L

Comments

  • Dave101t
    Dave101t Posts: 4,157 Forumite
    38,000 quid, roughly.
    have pity on me, im on a K433 code!

    please dont forget its not 40% of everything, only 40% of earnings over 38,000, so its not so bad to actually go over.
    Target Savings by end 2009: 20,000
    current savings: 20,500 (target hit yippee!)
    Debts: 8000 (student loan so doesnt count)

    new target savings by Feb 2010: 30,000
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    1,000 Posts Combo Breaker
    edited 29 October 2009 at 8:15PM
    simple answer is you add your (positive, ie 647L) tax code to the 40% threshold to get the amount of money you can earn before you pay higher rate (a K code is, simplistically, a negative code which is, I assume, why Dave's "understanding" is "different")

    so in OP case 6,475 + 37,401 = 43,876
    you will pay 40% on any money you earn over 43,875 and basic rate ie. 20% on your earnings between 6,475 and 43,875 with (obviously) the first 6,475 earnt being free of tax.

    the more complex answer depends on whether you make pension contributions, if the OP does this, them post back here and we can explain further
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.8K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.8K Work, Benefits & Business
  • 598.7K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.