Help - How much tax!

cpalace1

Please Help!

I’m currently earning over £40,000 and get a bonus of £5000 tomorrow although I’m half way through the tax year and earned about £25k this tax year. Will I get taxed a full 40% on my bonus or will it be 20%? Thanks in advance.

CLAPTON

it depends upon whether you pay into a pension and how much but yes you will pay some at 20% and some at 40%

cpalace1

CLAPTON wrote: »

it depends upon whether you pay into a pension and how much but yes you will pay some at 20% and some at 40%

i pay 3% into my pension

molerat

If you have earned £25K in the first half you should already be paying higher rate so my guess is 40% tax + 2% NI on the whole bonus

cpalace1

thanks for your help - its shameful the amount of tax we pay - so i have to give the taxman £2100 - this country is falling apart!

CLAPTON

well probably a little less

if you earn 40,000 and pay 3% into a pension (which seems rather low) and you have no benefits in kind then your taxable pay will be
40,000 - 1200 = 38,800

so you will only pay 20% +10.4% on 42475 - 38800 = 3675 and the 40% +2% on the remainder
in the month you receive it you will probably pay too much but that will correct itself in the following month

zagfles

CLAPTON wrote: »

well probably a little less

if you earn 40,000 and pay 3% into a pension (which seems rather low) and you have no benefits in kind then your taxable pay will be
40,000 - 1200 = 38,800

so you will only pay 20% +10.4% on 42475 - 38800 = 3675 and the 40% +2% on the remainder
in the month you receive it you will probably pay too much but that will correct itself in the following month

You're assuming he's in a contracted out pension scheme, unlikely with a contribution of only 3%. So NI more likely to be 12%.

And NI works on a pay period basis not annual basis, so he'd only pay NI at the 12% rate on about £300 of the bonus, rest at 2%.

Mikeyorks

cpalace1 wrote: »

- this country is falling apart!

Yep. Partially the bonus culture and significantly the level of personal debt.

How did you get on with the DMP you were asking about recently?

cpalace1

Mikeyorks wrote: »

Yep. Partially the bonus culture and significantly the level of personal debt.

How did you get on with the DMP you were asking about recently?

Ive got a friend helping out

Nothing wrong with the bonus culture at all people work hard for their rewards. whats wrong is getting tax 40% and paying 2% on my bonus when this country is a complete and utter joke :mad: