Pay Rise

[bednobs]

hi can anyone help me work out how much extra a month a 10, 000 pyrise would be ? Bearing in mind that it would flop over into the higher tax band

[bednobs]

prudie i don't think that can be right.

[bednobs]

well that'd odd

[fiction-factory]

Just put a bit more in your pension if you want to keep tax down.
You will also pay NI at 2% on the extra £10000.

[Prudie]

Well maybe it isn't right but this is a direct paste from the gov.UK website on tax for FY 16/17. I read that you'll pay higher rate 40% on £13K over the £43K

Income Tax rates and bands
The table shows the tax rates you pay in each band if you
have a standard Personal Allowance of £11,000.
Band Taxable income Tax rate
Personal Allowance Up to £11,000 0%
Basic rate £11,000 to £43,000 20%
Higher rate £43,001 to £150,000 40%
Additional rate over £150,000 45%

[fiction-factory]

As well as the 40% tax and 2%marginal NI, if you are repaying a student loan you will lose 0 or 10% (forgotten which) of the extra money and if you are in a contributory pension scheme there will be maybe 8% deduction for pension too (although there will be some tax saving)

[fiction-factory]

^for student loan I meant to type 9 or 10%

[bednobs]

thanks for all of your help. This isn't me getting a 10k payrise (i wish) which is why i had sort of sketchy details.
I realised after that the person get 44 k now but doesn't pay higher rtae tax, as they get childcare vouchers which reduces it to just below 43k.
I was confused as ubasses and prudies answer seem so wildly different. Still confused!

[fiction-factory]

Follow Prudie's table
Or look here.
Marginal rate is 40% tax + 2% NI but pension contributions can offset the tax.
https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2016-17/tax-and-tax-credit-rates-and-thresholds-for-2016-17
There are net pay calculators on line

[Peter Pedant]

eddie he is right again

upper bound (worst case) is that all £10k is taxed at 40% which is 4k and that leaves 6k which works nicely out at £500 / mo

any part that is taxed dlower effectively means more

[Peter Pedant]

confusing
we should all be coming out around £500 / month
arent we ? I havent gone thro all the answers....

as for hidden offsets you could always say / add
Oh - he has subs of £3000 ( they inflate the tax free band )
and gift aids at least £5000 a year but this year is only up to £1000.....
( also adds onto the tax free band at either 5k or 1k as is )

in which case it is more like £8k nett or 650 a month