tax and overtime threshold

mk2_dee

hi

just a quick question about tax and overtime. in my job i can get as much overtime as i want but i want to be carefull as i dont want to hit the high tax bracket.

basically if someonw could tell me how many hours ot i could work a week spread out over the year to maximise my earings without going into 40% tax, heres a few facts

im single male
£10.62 per hour
have a company car
37.5 hr week basic
ot x 1.5
ot x 2
travel time

what total earnings should i be aiming for every week without falling into 40% tax

BoGoF

Impossible to give the answer without knowing the cash equivalent of your company car. Do you have private fuel, do you pay into a pension?

Any particular reason why you don't want to go above the HR threshold?

getmore4less

Not enough details but back of a fag packet

High rate tax kicks in at over £40k

£10ph is roughly £20k per year

So you could roughly double your pay

car allowance/tax and pension make a difference up down

You still get standard wage for the holiday so that give a bit more for overtime in the other weeks.

heretolearn_2

Why are you so afraid of going into the higher tax bracket? I suspect that like a lot of people you think this would be applied to all your earnings? It isn't, it's only on the part that is over that threshold.

So to have maximum earnings you always want to earn as much as you can, sod the tax bracket. You'll always be better off earning more. So you end up paying 40% tax on a little bit of it...if you've earned £1000 in the 40% bracket you'll be taking home £600 of that. If you restrict your income so you don't earn that £1000 you take home £0 extra money.

getmore4less

Also to add

the tax goes up from 20%-40%
The NI goes down from 12% to 2%


net increase at HRT limit is 10%

dzug1

And if it's only the occasional week you go over the limit then you'll get it back in the following weeks anyway