Income Tax

[knitnat]

Because of working a lot of overtime this year my earnings by April will be very close to £42k and I do not want to pay the higher rate of tax next year. I get paid on the 15th of each month so ( i apologise if this is a stupid question)will it be my yearly earnings on that March payslip they will calculate it on or also what I earn in those extra few days up to 5 April. Hope that makes sense

[fiction-factory]

It's whatever pay you receive in the tax year (which usually ends on 5th/6th April).
But the 40% rate is only paid on any additional amount over the threshold so it won't make a huge difference- you still have £10600 at 0% and almost all the rest will still be at 20%. But you could always put just enough into AVCs to keep you below teh threshold

[1581960]

I'm sure its up to your last pay day in the current financial year.

[fiction-factory]

15th March 2016 will count as this tax year. Pay received on 15th April 2016- 15th March 2017 will count as next tax year.

[knitnat]

So fiction-factory I would't pay 40% on everything over £10k only on everything over £42k?

[fiction-factory]

That's right- or else for every extra £1 you earn you'd lose up to £20 which would be a nonsense. All the rates are marginal (until you get to the additional rate of 45 or 50 % (forgotten now) when allowances start to get stripped away too

[1581960]

People with the standard Personal Allowance start paying the 40% rate on income over £42,385, anything under that is taxed at the standard rate (20%)

[knitnat]

Thank you so much for all help sorry told you I was stupid lol

[Peter Pedant]

The info on your march pay slip has all the info for tax and tax year

you will also get a P60 in May but that just duplicates things

Ifyou are under £42k close to but under then you will pay
nothing on the first 10k and 20% on the rest 32k which I think is £6400 = that s about £525 per month

if you earn £43k then it will be an extra £400 on top of the 6400

simples really

[leesajohnson]

Income Tax is a tax you pay on your income