upper tax bracket

[jamie128]

I earn 24,000 a year so in the lower tax bracket, however this month i have 1000 extra of overtime.

So does this mean that this month they will times the extra 1000 by 12, and add it on to my salary to give me a yearly estimate and therefore charge me more tax i.e. 40% instead of 20?

Or does it not work like that, if they charge me more tax but at the end of the year im still below the tax bracket should i get a rebate?

Thanks

[russ_a]

An extra 12k wouldn't take you into the 40% bracket.

[jamie128]

russ_a said:

An extra 12k wouldn't take you into the 40% bracket.

I thought it was 32000?

[jamie128]

Btw i dont get overtime any other month

[CaptainSlow]

jamie128 said:

I earn 24,000 a year so in the lower tax bracket, however this month i have 1000 extra of overtime.

So does this mean that this month they will times the extra 1000 by 12, and add it on to my salary to give me a yearly estimate and therefore charge me more tax i.e. 40% instead of 20?

Or does it not work like that, if they charge me more tax but at the end of the year im still below the tax bracket should i get a rebate?

Thanks

It does work like that, but as said you won't go into the high rate (£32k plus £9k personal allowance = ~£41k)

[jamie128]

CaptainSlow said:

It does work like that, but as said you won't go into the high rate (£32k plus £9k personal allowance = ~£41k)

32+9? Im confused i know its tax free up to 9000 and then i thought it was 20% up to 32000 and then anything over 40%

[ellroy]

20% on the next £32k, not on the whole lot.

[russ_a]

NI contributions are also reduced so you don't actually lose an additional 20%

[New POD]

Why not start a SIPP, and put all overtime payments into that, as salary sacrifice. (I'm sure your payroll clerk can understand that concept)

That way you can play the stock market with your "secondary" pension, and if you are successful have a brilliant retirement.

This is how I keep my income below £25K.