Christmas Bonus (No idea where to post this)

kidmugsy

axel132132 wrote: »

I only ask because i heard that bonus' are not taxed

You should cultivate a higher standard of drinking companion.

Darksparkle

kidmugsy wrote: »

Contribute the £240 to a personal pension and your problem is solved.

Wouldn't it need to be the full £300?

jem16

Darksparkle wrote: »

Wouldn't it need to be the full £300?

If you contribute £240 tax relief is added to make it up to £300.

Darksparkle

jem16 wrote: »

If you contribute £240 tax relief is added to make it up to £300.

So why happens to the other £60 of the bonus?

jem16

Darksparkle wrote: »

So why happens to the other £60 of the bonus?

The bonus is £300 and tax is £60. Pay a net contribution of £240 into the pension and the provider grosses it up to £300 so you've got your £60 back and it's now in your pension.

Darksparkle

jem16 wrote: »

The bonus is £300 and tax is £60. Pay a net contribution of £240 into the pension and the provider grosses it up to £300 so you've got your £60 back and it's now in your pension.

So couldn't you pay the full £300 into the pension and not have any tax to pay?

CLAPTON

Darksparkle wrote: »

So couldn't you pay the full £300 into the pension and not have any tax to pay?

you can, if the employer will deduct from your gross salary and pay into the pension scheme
but for a private scheme, you pay the net amount from taxed income and then the pension scheme claims it back from tax man

jem16

Darksparkle wrote: »

So couldn't you pay the full £300 into the pension and not have any tax to pay?

As Clapton has described this can be done through gross salary if the employer allows it.

However the end result is the same as you still have £300 in the pension at a net cost of £240.

charliewocka

I pay higher rate tax and so lose 40% of my bonus. Yes, it can be painful to see thousands going to tax, but at the end of the day - it's a BONUS. We should be happy with any extra that we receive. As per the discussion above, if you want to see maximum benefit, put it into your pension, or donate it through salary sacrifice to a charity of your choice.

somethingcorporate

Agreed, getting 80% of something (or even 10% of something) is better than 100% of nothing.