40% tax? 8 February 2022 at 1:37PM in Employment, jobseeking & training 16 replies 2.3K views

getmore4less

Don't forget NI as a rough guide tax goes from 32% to 42% when you hit 40%

Then you have pensions that can keep you under anyway

Stick the excess in pension and live on the base tax earnings.

TBagpuss

You can put the numbers into a calculator such as this one https://www.uktaxcalculators.co.uk/tax-calculators/personal-tax-calculators/tax-calculator/ and see what changes to your salary would mean in terms of the tax and NI you pay, and the net pay. 
You can also add in things such as your pension contributions.

However, assuming that you are not paying into a pension and have no other income ,

on £50,000 you would pay £7,486 in tax, and NI of £5,315, so your take home pay would be £37,198

If you got a pay rise to £55,000 then you would pay tax of £9,432 an NI of £5,507 so your take home would be £40,061, so you would be just under £3,000 a year better off.

Assuming you are enrolled into your works pension then the numbers will be a bit different, but as others have said, you pay the higher rate of tax only on the earnings above the upper limit, so you are still better off on the higher wage even though you are paying tax at a higher rate on some of it.

penners324

jarv81178 said:

so basically, if you are on 50k and you are offered a pay rise, say "no, I'm ok on 50k thanks!" 

You'd miss out on extra take home, so why do that?

Ladydod75

take the pay rise and ask payroll to cap your income at £50271 by sweeping any excess into your pension!

JCS1

Ladydod75 said:

take the pay rise and ask payroll to cap your income at £50271 by sweeping any excess into your pension!

This thread was last commented on in February.........

GiantTCR

jarv81178 said:

so basically, if you are on 50k and you are offered a pay rise, say "no, I'm ok on 50k thanks!" 

Lool!

No.