Tax on wages

strawberrychewits

Hi i know im probably in the wrong forum but this is the one i come to most so hoping someone will point me in the right direction.
I have been taxed a 3rd on my pay this week due to a bonus. Will i get this back and if so how?

Was counting on the money for christmas shopping but have lost a chunk to the tax man :mad:

heartbreak_star

Nope, bonuses are taxable income sadly.

HBS x

strawberrychewits

Sorry i forgot to mention, i was expecting to be taxed a 5th not a 3rd, does it level itself out over the year?

victor2

Check with whoever runs your payroll. Assuming it's correct then you're unlikely to get anything back unless your employment circumstances change between now and the end of the tax year.
It might be that your bonus took you over a threshold for the next tax level, so you have paid higher tax on the bonus than you expected.
Unfortunately, the payroll is probably correct!

McKneff

You will have been taxed at 1/5th (20%)of your bonus which is the normal tax rate.

The rest of the tax will be attributed to the normal salary.

bluewire

Because you are already paying TAX and so using you allowance up over the year anything you earn on top (overtime and bonus) have no allowance to be taken off and so you pay the full amount:
20% Tax
11% NI (ish depending on how much you earn)

Nothing is to be balanced out over the remainder of the year, it is just that next month you will go back to normal.

fannyadams

Soz strawberrychewits, like HBS says, that's how the tax and NI system works, also (I hate to tell you this but) you won't be able to claim it back off HMRC either...
HMRC will tax you at 20% on everything you earn over the tax allowance which is currently £8105 per annum for tax year 2012/2013 (until you earn £34,370 pa after which you pay tax at 40% on the bit you earn over this figure IYSWIM) - your tax code will be 810L probably.
don't forget that you also pay NI on your wages too but the rates are quite complicated to explain here.
Sorry I couldn't help more
FA
x

onlyroz

Have you accounted for national insurance and increased student loan repayments?

I know that whenever I get a bonus I discover that tax and student loan repayments seem to gobble up most of it, but that's just the way life is.

Who was it that said the only certainties in life are death and taxes?

strawberrychewits

Thanks for replies everyone, oh well looks like the tax man is going to have a good christmas at my expense:o

strawberrychewits

onlyroz wrote: »

Who was it that said the only certainties in life are death and taxes?

Haha onlyroz, that made me chuckle!

I dont have anything like that, im just angry that my normal pay and overtime has also taken a bigger hit than normal

LittleMoog

The PAYE system assumes that you'll earn the same for each month remaining in the tax year based on what you've already earnt and what that month's amount is- if this would take you over the higher rate threshold you may pay more the 20%+NI and student loan. It then levels out over the next few months, so I always pay significantly less tax the month after a bonus as we get our bonus in April as it's the first month of the tax year. I always budget on losing 40% to tax including NI/SL, and it comes out about right.