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Estimated tax on redundancy payment - are my calculations correct?

skipfeeney
Posts: 123 Forumite


Hi All,
If you were to receive an 80k redundancy payment in the new tax year - how much tax would you be expected to pay? This is what I have calculated, does this look correct?
If you were to receive an 80k redundancy payment in the new tax year - how much tax would you be expected to pay? This is what I have calculated, does this look correct?
- 80k - 30k (tax free allowance) = 50k
- first £12,571 = is tax free
- 12,571 - 50k = 37429 (this is taxed at 20%)
- 20% of 37429 = £7485.8
Can I also just check that if you receive regular payments for being on call and it is in your contract then these payments will be included in any redundancy pay calculation?
Thanks
Thanks
0
Comments
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No. It will be treated as a monthly pay and if paid in April only £1048.26 tax free so £20774 tax deducted from £50K. That will not be the tax due for the year but will be what is deducted under the regulations. If you intend not to work and have no other income then you will be able to reclaim the difference from the £7485 due for the year.
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molerat said:No. It will be treated as a monthly pay and if paid in April only £1048.26 tax free so £20774 tax deducted from £50K. That will not be the tax due for the year but will be what is deducted under the regulations. If you intend not to work and have no other income then you will be able to reclaim the difference from the £7485 due for the year.0
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Do a P50.
Just follow the rules.
https://www.gov.uk/government/publications/income-tax-claiming-tax-back-when-you-have-stopped-working-p500 -
You could pay the 50k into your pension.0
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