Bonus Pushed Current Months Earnings Over 40% Threshold

reenie_reens

Hi All

I am a novice at post on site so apologies if i'm posting incorrectly or in the wrong place.

I just wanted some advice about tax and bonuses.
Basically this month I have been rewarded with a bonus, which will see my earnings (for this month only) go over the 40% threshold.

But for 2012/13 I will not earn over the £34,371 threshold; I calculate that my earnings will only be about £28,723 gross for the year. Included is my bonus & a 2.5% payrise from November.
So I am now wondering if I would be entitled to some of the 40% rate tax back?

Any responses are greatly appreciated.

Thank you.

SandraScarlett

Hi, Income Tax is accumulative, so your earnings from April 2012 to April 2013 is what you are taxed on. As long as your annual earnings are below the 40% thresh-hold, after your free pay (tax free allowance) has been deducted, then your total tax bill for the year won't be higher.

HTH.

xx

shop-to-drop

You will probably find you get some of it back automatically next month.

Itsgottabedone

As SandraScarlett says ^ PAYE is calculated for the entire financial year, so you shouldn't be taxed at a higher level this month, and your tax code should remain unchanged. Congratulations on your bonus and pay rise!

zagfles

SandraScarlett wrote: »

Hi, Income Tax is accumulative, so your earnings from April 2012 to April 2013 is what you are taxed on. As long as your annual earnings are below the 40% thresh-hold, after your free pay (tax free allowance) has been deducted, then your total tax bill for the year won't be higher.

HTH.

xx

Yes, assuming the OP's tax code is not a "week1/month1" code, which is not cumulative. These codes end W1 or M1, eg 810L M1

StephenM_2

reenie_reens wrote: »

But for 2012/13 I will not earn over the £34,371 threshold; I calculate that my earnings will only be about £28,723 gross for the year. Included is my bonus & a 2.5% payrise from November.
So I am now wondering if I would be entitled to some of the 40% rate tax back?
.

The 40% tax threshold is not £34371. Its £34371 + the personal allowance (£8105). So you have to earn £42476 to start paying 40% tax.

Russe11

StephenM wrote: »

The 40% tax threshold is not £34371. Its £34371 + the personal allowance (£8105). So you have to earn £42476 to start paying 40% tax.

agreed but we don't know the tax code of the individual, could well be their personal allowance is a lot lower.

most likely they have just over heard someone at work say some thing like "taxman has got his hands on my bonus so that half of it gone" or simular.

some people just don't know how the deductions from pay are calculated.