overtime and tax bracket

Clov!s said:
When is your next pay? The threshold is 46000 so you are going to earn 24000 in overtime?
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Wow - the amount of people in here that don't understand how PAYE works.

Simplified example.

46000/12 = 3833 average per month before you pay 40%.

So say you earnt 3800 for 6 months - that equals 22800 - for the next month you can earn 3800 + 198 ((3833x6)-(3800x6)). So if you earnt 5000 in the seventh month, you'd pay 40% on 969 (5000-3833-198). If by the end of the tax year you end up under the threshold, you'll get a rebate.
 
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amigafan2003 said:
Wow - the amount of people in here that don't understand how PAYE works.

Simplified example.

46000/12 = 3833 average per month before you pay 40%.

So say you earnt 3800 for 6 months - that equals 22800 - for the next month you can earn 3800 + 198 ((3833x6)-(2800x6)). So if you earnt 5000 in the seventh month, you'd pay 40% on 969 (5000-3833-198). If by the end of the tax year you end up under the threshold, you'll get a rebate.
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The best part of this post is where you say people don't understand how PAYE works and then you get it wrong how PAYE works :D :p
 
amigafan2003 said:
Wow - the amount of people in here that don't understand how PAYE works.

Simplified example.

46000/12 = 3833 average per month before you pay 40%.

So say you earnt 3800 for 6 months - that equals 22800 - for the next month you can earn 3800 + 198 ((3833x6)-(3800x6)). So if you earnt 5000 in the seventh month, you'd pay 40% on 969 (5000-3833-198). If by the end of the tax year you end up under the threshold, you'll get a rebate.
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Yeah I don't really care to be honest. That was 10 hours ago :p
 
amigafan2003 said:
Educate me then - what have I got wrong?
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Cheesyboy had a reasonably simplified summary, but the bit you forgot is that if the PAYE is on a cumulative basis and the monthly income goes back down to normal levels in month 8 onwards the tax paid in the following months will be lower as the tax situation resolves itself. As long as PAYE is operated correctly (and the tax code is correct, no other taxable income etc.) there should be no rebate at the end of the tax year.
 
Pudney said:
Cheesyboy had a reasonably simplified summary, but the bit you forgot is that if the PAYE is on a cumulative basis and the monthly income goes back down to normal levels in month 8 onwards the tax paid in the following months will be lower as the tax situation resolves itself. As long as PAYE is operated correctly (and the tax code is correct, no other taxable income etc.) there should be no rebate at the end of the tax year.
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Gotcha - I didn't properly account for the 8 month onwards cumulative aspect.

Thanks for the clarification.
 
Pudney said:
Cheesyboy had a reasonably simplified summary, but the bit you forgot is that if the PAYE is on a cumulative basis and the monthly income goes back down to normal levels in month 8 onwards the tax paid in the following months will be lower as the tax situation resolves itself. As long as PAYE is operated correctly (and the tax code is correct, no other taxable income etc.) there should be no rebate at the end of the tax year.
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In summary: DUDES, CHILL! LET ME TELL YOU ABOUT TAX.

The prophesies were true.
 
Pudney said:
Cheesyboy had a reasonably simplified summary, but the bit you forgot is that if the PAYE is on a cumulative basis and the monthly income goes back down to normal levels in month 8 onwards the tax paid in the following months will be lower as the tax situation resolves itself. As long as PAYE is operated correctly (and the tax code is correct, no other taxable income etc.) there should be no rebate at the end of the tax year.
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The amount of people I've heard say they can't wait for the tax rebate at the end of the year, then be disappointed haha. It nearly always works it self out.
 
Clov!s said:
When is your next pay? The threshold is 46000 so you are going to earn 24000 in overtime?
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That's not how it works at all. If your salary for a month is equal to or greater than 46000/12, then you'll be taxed that month at the higher rate. They work on a predicted salary amount.

My knowledge more or less ends here...
 
dirtychinchilla said:
That's not how it works at all. If your salary for a month is equal to or greater than 46000/12, then you'll be taxed that month at the higher rate. They work on a predicted salary amount.

My knowledge more or less ends here...
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Your knowledge ended before there bro. It's not right :D
 
my pays every 4 weeks so I get 13 wages in a year, I think my first payment for the tax year was 13th april and so far I think ive had 8/9 of the 13 wages

i wont be over be over 40k for the tax year and you guys seem to of all explained it all enough for me not to worry about capping my overtime :)
 
A2Z said:
For what reason? I get paid 4 weekly and in a few weeks will get my 'bonus' 13th pay basically. Will come in very handy!
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Things like rent/mortgage, and utility bills are always done on a monthly fashion so it works but much better for most people if they get paid a few days for these bills are due.


The counter argument is not every month has the same working days so this means for salaried emplolyees their daily/hourly rate changes a lot and when someone leaves their employment part way through the year there is some variance in exactly what you were really paid. Of course with holidays, vacation and sick time it is all more complex anyway, but months like February pay you more per day worked.
 
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