PAYE Jump

chrisbur

gt568 wrote: »

Ok, I don't normally go into the higher tax bracket. Due to my location I'm currently getting paid a bonus monthly that will stop in mid september. When my income returns to its normal levels (april for instance) will my PAYE correspondingly drop?

Have I understood this correctly?

As purdyoaten says the differance is small and not worth bothering with and as they explained the "tax jump" is due to your earnings going up and taking you just into the 40% band for June and further into it for July. You get about about £3490 for each month before 40% tax is due so when your earnings drop below this (ie back to April's £3231 you will get the opposite affect where some of the earnings that you paid tax on at 40% are converted to tax at 20% and lower your tax due by more than you would expect.

gt568

Thanks for clearing it up dudes.