Best month to be paid a bonus

Guest101

Lowermax wrote: »

Yes but if i'm wanting as big a lump sum as possible, then it is better to be paid at the end of the tax year so the system doesn't get confused, thats the way i'm understanding it anyway.

That's really not how it works, it just means that any rebate will come through quicker.

chrisbur

Guest101 wrote: »

That's really not how it works, it just means that any rebate will come through quicker.

In this case the OP has advised that they will not be in the 40% tax band at the year end so receiving their bonus in the last month of the tax year will result in the correct tax being deducted, assuming all else is correct there will be no tax rebate due so the question of how quickly it comes through does not arise.
The possibility of paying extra tax as a result of getting a bonus and then getting it back is greater the nearer to the start of the tax year you get the bonus. Assuming you are monthly paid each month your tax free allowance and your 20% band allowance increases by 1/12 for each month of the tax year. If you get the same each month no problem your tax is the same each month give or take a few pence.
The 40% band comes in when you earn over £43000 assuming standard allowances, so each month you allowances of tax free and 20% increase by 1/12 of that ie £3583 so if a bonus took you over £3583 in month 1 or £7166 in month 2 or £10749 in month 3 etc you would pay some tax at 40%. The following month you go back to normal earnings which are below the £3583 a month figure the tax deducted at 40% is re-calculated and you get some or all converted to tax at 20%.
Whether or not this happens and if it does how long it takes to correct whatever amount is required from 40% to 20% depends on the exact figures for earnings, bonus and when paid. All you can say without figures is that the chance of it happening is greatest at month 1 and reduces to zero at month 12.

Figures have been rounded a bit.