do we get taxed the more overtime we do?

andy.m_2

GGLLOYD wrote: »

some guff

You really ought to stop posting wildly inaccurate information as being true.
Either that or state that it is your best guess.

Someone may take your info as being accurate and later come to rely on it only to find out you were wrong.

Evilm

lovinituk wrote: »

Tax is based on actual income and the thresholds mentioned by others above. You shouldn't have to pay a one off of 40% on some overtime and not get it back if your overall annual income was below the higher rate tax bracket.

The figures in the post are NOT on the 40% tax bracket. They are the tax due for the extra income earned.

lovinituk

Evilm wrote: »

The figures in the post are NOT on the 40% tax bracket. They are the tax due for the extra income earned.

Apologies - I was talking cross-purposes. I see what you mean now.

Evilm

lovinituk wrote: »

Apologies - I was talking cross-purposes. I see what you mean now.

No problem.

paulwf

I've had this discussion with colleagues before, just because they regard the overtime as being taxable (because some of their basic falls within the personal allowance) doesn't mean it isn't worth doing. Roughly two-thirds of something is better than 100% of nothing!

hcb42

this myth has existed for ever, since I first started work 25 yrs ago and before that I am sure....people often say they earn "less" for doing the overtime than if they hadnt bothered...why they don't stop and understand that for a second is beyond me!

KiKi

hcb42 wrote: »

this myth has existed for ever, since I first started work 25 yrs ago and before that I am sure....people often say they earn "less" for doing the overtime than if they hadnt bothered...why they don't stop and understand that for a second is beyond me!

I know, it's like saying "it's not worth me earning anything over £7,475 because I'll have less to spend".

Well, you'll have less than 100% on anything over that amount, but you'll still have more than not earning over that at all!

KiKi

bob_dob

Thank you for all the answers! Luckily it should be fairly straightforward to work out my tax as i dont think i'll be having to be concerned about the complications of earning over £100,00! ;o)

Just a question- my friend's payslip shows a basic £1675.75 per month.
Im sure im wrong but i divided this by 100 (£16.7575) and multiplied it by 20 to get a total of £335.15, should this be what he is taxed and not the £227.20 that shows on the payslip?

The same goes for the NI, i worked it out as 12% is £201.09 where it is actually £131.89

Now, i know im wrong but please can someone explain where i've gone wrong?

nikki1520

Bob

You appear to have not taken into account the personal allowance.

KiKi

bob_dob wrote: »

Just a question- my friend's payslip shows a basic £1675.75 per month.
Im sure im wrong but i divided this by 100 (£16.7575) and multiplied it by 20 to get a total of £335.15, should this be what he is taxed and not the £227.20 that shows on the payslip?

The same goes for the NI, i worked it out as 12% is £201.09 where it is actually £131.89

Now, i know im wrong but please can someone explain where i've gone wrong?

As per the other poster (but I'm putting in calculations!) you're taking tax and NI off their WHOLE salary. You are forgetting that you get the first £7475 a year (or £622 a month) untaxed.

So you have to take off the personal allowance first (£1675 salary minus £622 that he can earn tax-free) which leaves £1053 which is taxable. Multiply that by 0.2 (for the 20%) and you get £210 which is much closer to that figure (slightly skewed by other things, I'm sure).

Similarly with NI, you can earn £139 a week before paying National Insurance. That calculation comes to £128, much closer to the £131 your friend has.

So you need to take off the non-taxable bits and the non-NI bits before you work out the tax and NI due.

HTH
KiKi