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Income tax and staring a job mid tax year

Hello,

Sorry if this is a silly question but if I’m starting a job in October that pays £60,000 per year, how is the amount of income tax I pay impacted (if at all) by starting a job mid tax year?

If there is an impact, how can I calculate it?

Comments

  • molerat
    molerat Posts: 33,847 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    What have you been doing so far this tax year ?
  • Sorry, I forgot to include that. I haven’t been working in any of this tax year or last year.
  • lisyloo
    lisyloo Posts: 30,035 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    If you had no other income then your first tax year your income would be £30k not £60k so you’d pay less tax.
    i.e your tax bill will be (30,000 - 12570) * 20% = 3486

    other income, taxable benefits, pensions etc. will affect it.

    in a full tax year it would be
    0 - 12570 at 0%
    12571 - 50270 at 20% = 7540
    60000 - 50270 at 40% = 3892

    in this case if you can afford it then you could save the 40% tax by putting it into a pension although you need to bear in mind you can’t touch that until at least 55 and possibly 57 depending on how old you are.

    this is simplistic and other factors will affect it but as you can see it’s not that hard to calculate it.
  • Thank you for breaking it down for me! I appreciate it.
  • molerat
    molerat Posts: 33,847 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 20 August 2022 at 9:45PM
    edit:  My first post was wrong so deleted it.

    If you have not had any taxable income so far then you tick box A on the new starter form. You will be allocated a code of 1257L which will give you all of the annual tax allowance to date which at October is £7337 so assuming £5K per month pay and no pension deductions etc deducting no tax.  November payday tax due will be  £322.  From then on you will pay £790 tax per month.. NI will be £442 per month.
    This year you will be a basic rate taxpayer, next year you will be higher rate and using this year figures paying £952 per month tax.

  • Thank you!
  • badmemory
    badmemory Posts: 9,195 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    And you will have to file self assessment.
  • badmemory said:
    And you will have to file self assessment.
    For what reason?
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