Tax/NI enquiry for bonus

ldratio

Hi all, I just tried looking for an answer, but all of the posts were from a while ago and things have changes regarding work and tax since then.

I'm due to be payed a 5k bonus on top of my 22k per annum salary next month.

The accountant has told me that I will be taxed around 45% on this because it has to go in at the same time as my salary - and therefore to the taxman it looks like my salary is a lot higher than it is.

Is this true? I make around £50 student loan payments monthly as well with my salary which is automatic and I think this will probably shoot up also with the bonus going in.

If they do charge me such a high tax on this, will I get a rebate at some point as my salary isn't actually that high, or is it beneficial tax wise to get it payed into my account seperate from salary.

I'm not great with tax and money so any help you guys could give would be fantastic.

molerat

Wrong board for this question but

Your SL repayments will be an extra £450 but it would work out the same if you were bonused £1000 per month for 5 months.

You will pay some tax at 20%, some at 40% but as you move on in the year that 40% tax will be repaid each month.

NI will only be deducted at 2% on earnings over £3583 so making you better off than having the bonus paid in smaller monthly amounts where it would all attract 12%.

Paying it outside your salary would make no difference - if it was paid that way to avoid tax then it would probably be illegal.

edit for a rough calculation

All the overpaid tax will be paid back in June. By having one large bonus payment you will save £325 of NI over smaller payments which offsets most of the extra SL repayment.

ldratio

That's great info Molerat thanks.

So say my total June paypacket comes to around 6.6 before tax - how much will I take home? 1.6k of that being my salary.

As you say, the overpaid tax will be payed back the following month, this is basically all I wanted to know.

And also, what is the overall % of tax I will have paid when all overpayments are returned, or is that too complicated?

molerat

£22K annually works out at £1833 per month gross not £1400. £5K bonus paid in June will only attract 20% tax anyway so no extra tax to refund.

You will pay roughly £1000 tax, £275 NI and £450 SL leaving you with £3275 of the £5K, 34.5% deductions.

ldratio

Yes, was my mistake was putting my net.

That's great. Is there anything online that states this?

Darksparkle

Are you plan 1 or 2 for your student loan?

ldratio

Through PAYE, so I guess it's Plan 1. Not entirely sure, only know how much I'm currently paying back I'm afraid.

Darksparkle

ldratio wrote: »

Through PAYE, so I guess it's Plan 1. Not entirely sure, only know how much I'm currently paying back I'm afraid.

Being PAYE doesn't tell you if it's plan 1 or 2.

https://www.gov.uk/repaying-your-student-loan/overview

What plan will determine how much you'll pay.

ldratio

I'm on plan 2 then.