Calculating taxable pay
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Anomaly100
Posts: 42 Forumite
in Cutting tax
Currently trying to work out taxable pay.
Pay in 2015-2016 as per P60 £62110 tax paid £14243
But pension contributions are deducted from taxed pay with tax relief at 20% being added by the pension company.
So £6442 has been paid into the pension but with tax relief at 20% it equates to £8052 in the pension fund.
So is the taxable pay
£62110 - 6442 = £55668
or is it
£62110 - 8052 = £54058
Any help appreciated.
Pay in 2015-2016 as per P60 £62110 tax paid £14243
But pension contributions are deducted from taxed pay with tax relief at 20% being added by the pension company.
So £6442 has been paid into the pension but with tax relief at 20% it equates to £8052 in the pension fund.
So is the taxable pay
£62110 - 6442 = £55668
or is it
£62110 - 8052 = £54058
Any help appreciated.
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Comments
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online calculator and tick box for use advanced options ....
http://www.moneysavingexpert.com/tax-calculator/0 -
Surely the answer to the question can only be determined if we know why the op was asking it?
If op is completing a self assessment return then taxable pay would be neither of op's suggested answers but is £62110.
If op is checking a PAYE calculation from HMRC
then taxable pay would be neither of op's suggested answers but is £62110.
The pension contributions, assuming paid by op which he/she hasn't actually stated, would be entered elsewhere on the return but would never alter the fact that taxable pay is £62110.0 -
Yes, "taxable pay" is still £62110. On the SA calculation, the basic rate band will be extended to give the extra relief.
For stuff like child benefit, tax credits, and university finance assessments etc the gross pension contributions are deductible from taxed pay.0 -
Sorry asking in order to work out how much child benefit needs paying back. I know I can reduce pay as far as child benefit is concerned by making additional pension contributions.
So for the purposes of child benefit earnings are either £55668 or £54058. Obviously I'd like it to be the lower one so I get to keep more child benefit. Playing around with the child benefit calculator I'm fairly confident it is the lower one and owe around £1000 but then further tax relief is due on pension contributions which should wipe this out.0 -
Anomaly100 wrote: »Sorry asking in order to work out how much child benefit needs paying back. I know I can reduce pay as far as child benefit is concerned by making additional pension contributions.
So for the purposes of child benefit earnings are either £55668 or £54058. Obviously I'd like it to be the lower one so I get to keep more child benefit. Playing around with the child benefit calculator I'm fairly confident it is the lower one and owe around £1000 but then further tax relief is due on pension contributions which should wipe this out.0 -
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