Quick question about tax and being paid for leave not taken 26 January at 12:37PM in Cutting tax 3 replies 90 views

Sandwich

My partner has been offered a choice between: (1) receiving back pay for annual leave not taken during maternity leave or (2) staying on leave for longer by using the annual leave now. My question is, if she takes the pay, will she lose a disproportionate amount of it to tax based on her income for that month pushing her into higher tax brackets? (She's currently paid approximately £20k per annum). 

purdyoaten2

If paid in January she would have to receive around £25000 in back pay  to hit the higher rate tax threshold- very unlikely.

Sandwich

purdyoaten2 said:

If paid in January she would have to receive around £22000 in back pay  to hit the higher rate tax threshold- very unlikely.

She would be paid probably in March and it would be for about two months pay, so we're talking low thousands. 

purdyoaten2

Sandwich said:

purdyoaten2 said:

If paid in January she would have to receive around £22000 in back pay  to hit the higher rate tax threshold- very unlikely.

She would be paid probably in March and it would be for about two months pay, so we're talking low thousands. 

Total pay for the tax year would have to exceed £50270. The only concern would arise if her tax code ended in ‘X’ or M1. Otherwise there is nothing to worry about.