Tax & Bonus

lisa701

Does anyone know how I can calculate how much of my annual bonus I will actually receive?

Last year I lost over a 3rd to the taxman, money which I could have used to repay my overdraft. My employers prefer to pay us all minimum wage rather than add the £500 - £1000 bonus to our annual salary, which I'm sure would result in us loosing less to tax. Want to see if this year I can repay my overdraft and stop the high monthly charges.

dzug1

The timing of your bonus should make zero difference to your total tax. It could make a difference (which could go either way) to NI.

CLAPTON

it depends upon your income but if the bonus doesn't take you into 40% tax band then you will lose 20% tax and 11% NI

it makes absolutely no difference to the tax you pay whether the bonus is paid in one go or spread throughout the year; potentially the NI might differ a bit but if you are medium income then that will be the same too

lisa701

I'm quite sure it won't bring me into the 40% tax band (if only I earned that much) so it looks like I'm going to loose around 30% as I did last year. Well I suppose a couple of hundred quid is better than nothing, at least I might be able to pay off my overdraft and stop the sky high charges.
Thanks for the help.