How to work out what the tax will be on my bonus?
How much tax would a person pay on £2,206? The tax payer pays PAYE rate of 40% and how do you let the tax person know?
Firstly you'll find this excellent guide to saving tax* useful. It not only explains how the tax bands work it provides some great tips on how you can reduce your tax bill now.
The easiest way to work out your tax under PAYE is to use a PAYE calculator. Here I explain how to calculate the tax on your own bonus & check your tax code is correct in just 1 minute. All you need to know is your gross salary and bonus amount
But assuming that you are a 40% tax payer then from £2,206 you are looking at receiving around £1,278 after income tax and National Insurance.
If you are receiving the money as part of your salary then it will be taxed automatically under PAYE. On the other hand if it is from another source you will need to register for a self assessment tax return in order to pay the tax. Here is link explaining why and how to register for a self assessment tax return.
But do make sure you check that you are on the correct tax code.
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