bonus takes over tax threshold

jem16

chrisbur wrote: »

I suspect that it was the combination of tax and national insurance that came as a shock,rather than just tax.

Probably - I was forgetting the NI.

SHEILA54

Hi
She hasn't been given it yet as they are trying to work out the best way to do it. I have just been reminded that she is paid 4 weekly. Will this make a difference?

Working on what has been said she should get some of it the 1st payday, some the 2nd and then any remainder in the 3rd, based on the tax tables?

Also she still comes under the NI threshold annually but will she have to pay this ?

Thanks once again

jem16

SHEILA54 wrote: »

Hi
She hasn't been given it yet as they are trying to work out the best way to do it. I have just been reminded that she is paid 4 weekly. Will this make a difference?

Perhaps a little but no much.

However if she's not been paid it yet it won't matter much from now on.

Her tax-free allowance is £820 per 4 week period. Each 4 week period she's paid £400. By Week 12 she has enough tax-free allowances to cover her normal wage plus the £1000 - ie tax free allowance for Week 12 is £2460. Her gross wage by Week 12 would be £1200 plus the £1000 is £2200 so less than the tax-free allowance.

So if her backpay is paid from Week 12 on and she gets her normal wage there will be no tax due provided she does not have a non-cumulative tax code for some reason.

Also she still comes under the NI threshold annually but will she have to pay this ?

NI will still be due I'm afraid as it's based on her wage for that 4 week period. It's not worked out as an annual amount like tax. The only way to avoid it would be if her employer would be happy to pay the backpay over the course of a few 4 week periods.