tax on 46,000 emp inc

lorelai34

Hi there,
wondering if anyone can help. Hubby was currently earning 37,000 gross per annum from employment but has changed jobs and will now be earning £46000. One of his friends said he'll now be classed as a high rate tax payer. Is that correct? Do you pay 40per cent tax on full income of 46000? Any help in simple terms would be appreciated. Thanks.

anselld

In the next year 40% tax starts at £41866
You only pay 40% on the amount above this.
Time to start a pension perhaps?

Pont

No, it's a sliding scale. Depending on his tax code, according to listentothetaxman his net wage will be £33,643.36.

Pont

anselld wrote: »

In the next year 40% tax starts at £41866
You only pay 40% on the amount above this.
Time to start a pension perhaps?

Absolutely!

Linton

In your husbands case, he pays 40% higher rate tax on:

(Gross salary - gross pension contribution) - tax allowance - 32010

and 20% on what remains - tax allowance.

That is for 2013/2014 tax year.

The gross salary is the income over the tax year, so since it is late i the year I assume that he wont be paying higher rate tax til next year.

For 2014/2015 better make sure that he is paying sufficient pension contributions to remove his liability to higher rate tax completely.

purdyoaten

lorelai34 wrote: »

Hi there,
wondering if anyone can help. Hubby was currently earning 37,000 gross per annum from employment but has changed jobs and will now be earning £46000. One of his friends said he'll now be classed as a high rate tax payer. Is that correct? Do you pay 40per cent tax on full income of 46000? Any help in simple terms would be appreciated. Thanks.

£46000 before or after pension scheme contributions?

lorelai34

thanks everyone. He currently doesn't pay into a pension so he'll need to start I guess.

Linton

lorelai34 wrote: »

thanks everyone. He currently doesn't pay into a pension so he'll need to start I guess.

Madness, especially if the employer contributes. Fancy living on £7500/year state pension? Bit of a comedown from £46K!

lorelai34

Reason he doesn't just now is because we're saving for a house deposit as currently still renting. I've told him he should start paying into one but he says we should wait till we have a mortgage?

Pont

Google listentothetaxman and play with the figures!

For example, if your husband paid £4,000pa into a pension his net pay would be £31,243.36. Roughly £2,500 down on his net pay compared to if he didn't pay into a pension. He/you would already be quids in to the tune of £1,500 and then take into account his employer's pension contributions too - nice little earner ;-)

lorelai34

thanks will do