Help calculating tax and NI on Bonus - right place to post??

SpendCurber

www.listentotaxman.com is 'fairly' accurate. HTH

Conor_3

cjoxford wrote: »

Hi everyone,

I'm not sure if his is the right place to poast, but the most people were viewing so hopfully you can prod me in the right direction if not! I have very fortunately been given a bonus from work and I want to work out how much will actually make it into the sea of debts to pay back! I have used calculators to work out tax and NI off my salary but I don't know how to do it on this bonus.

Would any kind soul please help me.

Many thanks in advance

QUICK RULE OF THUMB/FAG PACKET CALCULATION:

If you're not into the 40% Income Tax bracket with the bonus and this years wages, and you'll have earned over £6k, work on 25% of the bonus being payable as NI and Income Tax.

misspoppy

Hi

I'm sorry but the 10% bracket was abolished at the last budget and so you pay 22% then 40% the best way of working is to use the % of total deductions from your last pay slip it shouldn't be too far out, unless you are likely to be tipped over into the 40% bracket

nobblyned

misspoppy wrote: »

Hi

I'm sorry but the 10% bracket was abolished at the last budget and so you pay 22% then 40% the best way of working is to use the % of total deductions from your last pay slip it shouldn't be too far out, unless you are likely to be tipped over into the 40% bracket

I don't think the abolition of the 10% band comes in until April 2008

Glasgow_Paul

Hi

The abolition of 10% tax rate and the reduction from 22p per £ to 20p per £ do NOT come into effect till the tax year after they were announced.

This means that they will not come into effect till April 2008. Great stunt work by the former chancellor now Prime Minister. At least he can say he was the only PM in the last ten years to lower income tax (although it didn't since he got ride of the 10p rate) since it comes into effect in April 08.

Cheers

oscar52

Simple.

If your monthly amount, including your bonus is less than £2883 - this is the 40% tax band threshold - £34600, simply multiply your bonus by 0.67 - 0.22 (or 22% tax) and 0.11 (or 11% NI) this will give the correct amount. ie £1000 * 0.67 = £670.

irnside

Sorry for jumping in on this but I have another (related) question.

The income tax limits as I understand for this year (2007-2008)are:

Personal allowance £5,225
Starting tax rate @ 10% £2,230
Basic tax rate @ 22% £2,231 to £34,600
Higher tax rate @ 40% £34,601

Does this mean the first £5,225 is not taxed?
Then you pay 10% tax on the next £2,230 (up to £7,455)?
Is the actual upper cut-off for 22% basic tax 34601+7455 = £42,056 OR is it just £34,601?

i.e. if I earn say £35,000 a year I pay no tax on first £5,225, 10% tax on next £2,230, 22% on next £32,369 (34600-2231) and then 40% on final £399?
Or is all of my pay above £7,455 in the 22% band because I earn less than £42,056?

I've got other questions as well on how I factor in company medical insurance and company pension etc. but I need to get my head round this one first

tigtag02

irnside wrote: »

i.e. if I earn say £35,000 a year I pay no tax on first £5,225, 10% tax on next £2,230, 22% on next £32,369 (34600-2231) and then 40% on final £399?

The above is correct