Lump sum contribution to avoid marginal tax

Youll

Evening!

To date (week 47) my taxable pay is 92k, so by week 52 will be moving into the marginal tax bracket.
I’m struggling to work out how much of a lump sum contribution I should make in order to keep my taxable income under 101k.
I have the option to do this before tax through my employer, but don’t understand how my income tax will be calculated?
For argument sake if I was going to hit 110k should I make a one off, of 10k or 6k assuming I would be pay 40%tax on that 6k? :huh:

Dazed_and_confused

You need to consider "adjusted net income" not just your taxable salary.

And why under £101k not under £100,002?

If it is net pay arrangement then the pension contribution simply reduces your taxable income.

For example salary in week 52 is £2,500. Less pension contribution of £1,500 under net pay arrangement means taxable pay is only £1,000.

There is no tax relief for you to claim, the maximum possible relief is given by virtue of you only having £1,000 taxable income instead of £2,500.

Youll

I’m not sure I’m explaining myself too well...
I want to avoid losing my £11850 tax free allowance by going over £100,002.

If my end of year taxable income is likely to be £110,000.
I’m trying to workout how much I would need sacrifice from that £110,000,
a) before tax, through salary sacrifice.
Or alternatively
b) after tax, by transfer in.

Dazed_and_confused

A) £10,000
£10,000 (gross contribution including basic rate relief at source)

ffacoffipawb

Youll wrote: »

I’m not sure I’m explaining myself too well...
I want to avoid losing my £11850 tax free allowance by going over £100,002.

If my end of year taxable income is likely to be £110,000.
I’m trying to workout how much I would need sacrifice from that £110,000,
a) before tax, through salary sacrifice.
Or alternatively
b) after tax, by transfer in.

You do realise that it is only lost at the rate of £1 for every £2 in excess of £100k.

You wont lose it completely until you get to about £123k, or £125k next tax year?