Tax Bracket? (sorry if its a silly one!)

Silaqui

Hi everyone, hope this is the right place.
I have recently earned a promotion which has moved me from earning 48k to 51k. I pay 10% to my pension directly from my salary.

Would I be in the 40% tax bracket due to the 51k? Or do I disregard the pension contribution giving me effectively 46k (and therefore lower tax band).
Thanks in advance - I just find the information on this so confusing! 

Dazed_and_C0nfused

All your payslips should give you a clear answer to this.

What I think is likely is that you are earning £48k but only have taxable pay (the amount which goes on your P60) of £43,200.

And once earning £51k you will have taxable pay of £45,900.

The above assumes you are contributing to a "net pay" pension scheme.

68ComebackSpecial

Does your employer provide any taxable benefits - e.g. company car, private fuel, private medical insurance? If so the value of these would need to be added onto your taxable pay. 

Silaqui

Thanks both, no other benefits at all of any kind. I haven't had a payslip at my new salary yet which was why I was wondering whether it would be enough to boost me over the bracket or if the pension would in effect reduce the total. 
Thanks again! 

Marcon

Silaqui said:

Thanks both, no other benefits at all of any kind. I haven't had a payslip at my new salary yet which was why I was wondering whether it would be enough to boost me over the bracket or if the pension would in effect reduce the total. 
Thanks again! 

You'll receive higher rate relief on your pension contributions to the extent these have been paid out of income taxed at the higher rate e.g. if only £100 of your annual earnings is taxed at 40%, only £100 of your year's pension contributions will get higher rate relief.

If pension contributions are paid out of pre-tax salary, any higher rate relief is automatic. If your contributions are paid out of net salary, you would need to claim higher rate relief from HMRC (the pension provider will claim basic rate relief and add it to your pension pot).

AskAsk

I believe your pension contributions will be deducted from your gross pay to determine whether you are in the high tax band or not.  So you will stay as a basic rate tax payer.

[Deleted User]

This might help - https://www.thesalarycalculator.co.uk/salary.php - and also this link which is on that same page - https://blog.thesalarycalculator.co.uk/paye/pensions/pension-contributions-on-the-salary-calculator/

General_Grant

And remember that it is not just your PAYE earnings which are taxable and therefore can mean you have to pay more tax on this other income.

MrsStepford

If you end up in higher tax bracket, don't forget that for every £100 you give in donations or donated goods to a registered charity, you can claim back from HMRC. Basic tax rate payers can't get this.