How will bonus affect my net pay?

Gambler

I'm due a bonus next month which will push me into 40% tax for the month but I know that this will be adjusted in later months to ensure I am still within the limit overall.


However what happens with NI? Does that get adjusted too for the year or is it for the month only and it's tough luck?



Thanks

CLAPTON

if your april pay is higher than usual, then you will be taxed on the basis that this monthly amount continues for the whole year.... so you will pay too much tax.

As its a one off bonus this means that in May your gross pay will be less and you will get some of the excessive April tax back... It depends upon the amounts but by june /july you will be back to normal.

There will be no adjustment of NI as these are worked out on a monthly basis and not cumulatively like income tax.

Gambler

CLAPTON wrote: »

There will be no adjustment of NI as these are worked out on a monthly basis and not cumulatively like income tax.

Thanks for this. Just my luck then, first bonus I've had in about 5 years and it coincides with the huge rise in the NI threshold :mad:

theculverhouses

Don't forget though if you're a director of the company there are different methods of calculation. You didn't mention this so I suspect you're not - but worth remembering for future, you never know you might be running the show one day.:T