Tax payable during bonus month

Alexhow

Evening all

I'm hoping there is a "taxpert" out there who wouldn't mind assisting me in calculating how much tax I should be paying this month. My pay slip puts it at c. £2k but this is much more than the result I have been given by an online calculator (thesalarycalculator or tsc), which puts the figure at closer to £1.5k.

The figures:

Annual salary: £35k
Tax code: 1150L

Annual bonus payable this month: £5,818
Pension: £48
Childcare vouchers: £243
Student loan repayment plan 1

Student loan repayable for the month according to tsc: £630.94
NI according to tsc: £463.19

Thank you in advance for any time and effort provided in responding to this post.

dori2o

When using the online calculator did you simply put in your annual salary?

If so this doesn't take into account the fact that you have only accrued 2/12ths of your tax allowance at this point in the tax year.

You will see that over the next month (or possibly 2) your tax deduction will balance out as the 40% tax you have paid in month 2 of the tax year is repaid to you.(assuming yo dont continue to earn in excess of £45K.

Your employers payroll system is rarely wrong.

In order to check you will need to provide the total pay to date figure from your latest and last months payslip, the tax deducted this month, tax deducted last month.

Alexhow

Dori2o

Thank you very much for your swift and helpful response.

What you have said makes perfect sense.

I did simply input my salary and bonus figure into the tax calculator I mentioned.

As for the other figures you mention, they are:

Total pay to date figure: £10,332.54 (by way of an explanation, my salary in month 1 was £25k p/a - it was £35k effective from 1.5.17 and I have been awarded the bonus I mentioned)
Tax deducted last month: £176.20 (against total payment of £1,840.33)
Tax deducted this month: £2,072.73 (against total payment of £8,492.21)

Thank you

dori2o

Tax code 1150L gives £959 tax free per month,
The next £2792 is taxable at 20%
For you the rest is taxable at 40%

So at mth 2 (6 May to 5 June), freepay is £1918 and 20% band accrued is £5584.

Total pay = £10332 - 1918 = £8414 taxable pay
Of that £8414:
£5580 is taxed at 20% = £1116.80
The remaining £2830 taxed at 40% = £1132

Total tax is approx (allowing for rounding etc) £2249.

Lets assume..Taxable gross Pay in mth 3 =£8493 - 5818 = £2675

£2675 + 10332 = total gross at mth 3 of £13007

3 months freepay = £2877
3 months 20% band = £8376

So, £13007 - 2877 = £10130 taxable
£8376 @ 20% = £1675
(£10130 - £8376) = £1754 @ 40% = £701
Total tax at month 3 £2376
Less tax paid mths 1 & 2 = £127

You'd then see your tax increase over the next few months until you get to the point where your income fell below the 40% tax limit at some point in the next few months and you start to pay what you would normally expect to pay on your salary based on the details you've provided.

As an example of what your monthly tax would be on £35k without the bonus but adjusting for pension etc:

£2675 - 959 = £1716
£1716 @ 20% means tax = approx £343

This can be verified as follows

£176 per month on £25k (as per information you provided re tax deducted in month 1)

Payrise £10k

Tax on 10,000 @ 20% = 2000
Per month this is 2000 / 12 = £166

£166 + £176 = £342.

Alexhow

Dori2o

Thank you once again. That's very helpful.

Have a great day.

isasmurf

You can use a payslip calculator to calculate tax due in year.

https://www.uktaxcalculators.co.uk/payslip-calculator.php