Have I got this right?

Rusty190

Maths (and tax matters) are not my area of expertise.

Am I along the right lines in my thinking, please?

Higher rate tax start to become payable when income hits £50,271.00 onwards to £125,140.

A total income of £50,270.00 would remain in the 20% tax bracket - for now.

50,270/12 = £4,189.16 per month, pre tax.

20% of 4,189.16 = £837.83 tax to pay at 20% rate.

£4,189.16 - £837.83 = £3,351.33.

So, for a basic rate tax payer, with no other benefits/allowances/exemptions, keeping income at or below £3,351.33 should mean they remain in the 20% tax bracket.

Is that correct?

Many thanks.

Isthisforreal99

Way off, you have forgotten about the tax free personal allowance of £12,570.

And looking at it from net income is a strange way to try and calculate it. Quite simply, if all your taxable income is under £50,271 you are a basic rate taxpayer.

Rusty190

OK. So, if I deduct that £12,570 from the £50,270 at the beginning, I could then do as I've done above to get what the net monthly income limit is?

I appreciate it's strange - but it would be helpful for me, as a novice. Thank you.

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/82014984#Comment_82014984

Yes deduct £12,570 but you can't rely on net pay as you will also have NIC deducted.

Dazed_and_C0nfused

And possibly pension contributions and student loan repayments.

mlz1413

The tax man looks at your gross pay, but that isn't what arrives in your bank if you are salaried.

But there are lots of payroll calculators online including one by Gov.uk.

Run some figures through and see if they answer your questions.

Rusty190

Thank you all.

No NIC, pension contributions or student loans.

I'll look at some of those calculators, dig out P60's and see if I can get my answers.

I may be back........

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82015062#Comment_82015062

If you have P60's, that would suggest your income is from employment.

If you have employment at the salary levels indicated £50k, then there will be NIC arising. There is typically pension contributions arising also, though some employer-schemes are wholly employer funded.

Your target seems to be expressed in an unusual manner and I am unsure whether you are being clear about how your income is derived. No need to share anything you don't wish to share but please be aware that variances in the details can have a bearing on the resultant tax liabilities.

Rusty190

P60's from/for workplace pensions.

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/82015148#Comment_82015148

If you want relevant answers then it would have been helpful if you set the scenariio at the outset.

It still makes zero sense to do it on a net income basis as you are reliant on the tax code operated being 100% accurate. If it's not you could tip into the higher rate bracket. You are massively overcomplicating it - for someone with purely pension income then as long as your gross monthly income from all sources is not over £4189 then you will be a basic rate taxpayer.

Rusty190

Thank you. Much appreciated.