Lump sum for returning to work

galaxynicole

Hi Guys

Anyone else been paid a lump sum for returning to work? My lump sum is getting put into my normal pay so it means that I go into the 40% tax rate and it looks like I will be paying 4x than I normally pay in tax, 3x more NI and 4x more student loan.

Apparently, I can't claim back the NI and the overpayment of student loan but the tax is another question.

Did yours get average out over the year ie did you pay less tax over the tax year to compensate or did you have to claim it back?

Now I've worked it out, it's not as much as lump sum considering I'm only getting 1/3 of the 'lump sum' straightaway. Not to sound ungrateful as I know my company doesn't have to give me it but it just feels wrong. Also I'm sure my company gets some kind of tax break for it or something.

heretolearn_2

You can't really be paying 4 x the tax . It doesn't work that way.

If you get tipped over the 40% threshold, you only pay 40% on the amount that is over, not on the whole lot. And if it turns out that over the course of the year you really were under the threshold with your total income, (as you've only got that higher income for 3 months I take it), then the excess tax will be refunded.

(even if that weren't the case and you paid the rate on everything, if you were previously paying 20% and are now paying 40%, that's double, not 4 x).

I've never heard of anyone getting a lumpsum at all for returning, most employers won't give you that, so even if you are paying tax etc on it, you are still much better off than most returners, who only get their salary as usual.

galaxynicole

No, I have work it out through Listentotaxman website and I am paying 4x the amount of tax that I would normally pay for that month unless like I said that they compensate for it throughout the tax year. That lump sum makes it look like I earn 60k a year for that one month and I definitely don't! I wish!

Lindy_-_Loo

My neice reurned to work in December and got her return to work bonus last month. She was expecting £2500 but after the extra tax and NI she got just uner £1900. She has only returned to work doing 16 hours a week and she was not expecting to have that much taken off.

she spoke to the rax office and apparently the amount taken was correct. shes hoping for some of it back in a tax rebate

aliama

heretolearn wrote: »

I've never heard of anyone getting a lumpsum at all for returning, most employers won't give you that, so even if you are paying tax etc on it, you are still much better off than most returners, who only get their salary as usual.

There was another thread recently about maternity cover and whether it would have to be paid back if the OP didn't return to work. Gist was that SMP wouldn't have to be, but if the employer paid over and above SMP the excess might have to be paid back.

One of the posters (can't remember who, sorry) mentioned that her company paid enhanced maternity pay, but the excess would be paid back in a lump sum when the employee returned to work. It meant that the employee wouldn't have to worry about having to pay the money back if they didn't go back, and provided a chunk of money to help with childcare costs.

Seems like that's what's happened here?