Posted 20 hours ago

Tax help

Hi my partner currently earns around £9,000 a year tax free and is looking to do extra hours.
5 hours takes her still under the £12,570 take free allowance but seeing if she is better doing 10 extra hours and earning around £14,500 but just struggling to work out whats she best off doing money wise.
Will she get taxed on the extra £1800 she goes over her allowance or taxed and £14,500 she makes in the year?
Thanks in advance for the help
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  1. bozo007's avatar
    If your cash flow permits it, she can contribute to a pension and reduce the tax liability further. Contributing the entire £1800 will mean zero tax plus HMRC will top up the £1800 with 25%, so another £450; this is because pension contributions are reduced from income before tax is calculated. Again, only if cash flow permits because this money can't be touched until the mid 50s at a minimum.
    Palwan's avatar
    are you sure about 25% topup and tax exception

    I agree most of your comments but not here
  2. Chiptivo's avatar
    52572305-yEC1f.jpgOnly gets taxed on the amount over the personal allowance of £12,570 (2024)

    So will be taxed 20% of the £1800


    Assuming England or Wales.
    Scotland add a more complicated band because they want to be difficult and different. SNP OUT

    riftrefunds.co.uk/adv…ce/ (edited)
  3. Willy_Wonka's avatar
    Unless you are on benefits it doesn't matter.

    The more you work the more you earn. I think your assumption of the tax system is incorrect & a lot of people think the same.

    You only pay tax on the money you earn over each allowance. You don't pay any extra tax on the money below that allowance.

    So if she earns £14500 she only pays tax on the difference between £12570 & £14500. Not the full £14500.

    If she earns £18000 she only pays tax on the difference between £12570 & £18000. Not the full £18000.

    You are always better off working more unless you have benefits that effect it & that only applies to things like free prescriptions & school meals etc that you might lose.
    mutley1's avatar
    Yes, if you need the extra income, then tax shouldn't matter. If you don't need the extra money, then you may think it isn't value to work for the extra pay net of tax
  4. desiboy80's avatar
    And there's me worried going over £125k 🤷‍♂️
    bozo007's avatar
    £125k hurts the most because of the tapering of the tax free allowance. So try to get to £200k+ and you won't feel the pain as much
  5. kitchenmonkey's avatar
    She'll have a small amount of Ni to pay as well, I use this website a lot, it'll show you the difference in take home pay.

    uktaxcalculators.co.uk/
  6. Helpful567's avatar
    thesalarycalculator.co.uk/sal…php


    If you want to know what your take home salary would be, then look at the thesalarycalculator website.




    (edited)
    Helpful567's avatar
    £14500 salary


    £ 13,959.60 take home pay.
  7. Killer's avatar
    Check the HMRC TAX Calculator

    gov.uk/est…tax
  8. Renoir64's avatar
    Assuming the upper figure of £14 500 then tax would be about £380 per annum so just over £30 a month.
    Your concerns are because of the fiscal drag which means its less obvious about doing extra hours.
    The decision to freeze the tax allowance while wages, including living wage go up means more and more people are paying tax and obviously people are paying tax on a bigger proportion of their earnings.
    Many pensioners are now paying tax on their state pensions.
    Bottom line is that £14500 would mean a tax rate of less than 3% on the full amount.
    Obviously these figures don't include national insurance.

    But as others say use the HMRC tax calculator to check from an official source.
  9. uni's avatar
    she'll only pay tax or NI for the values over the relevant thresholds. didn't notice age mentioned, but NI isn't payable by employees under certain circumstances

    depending on pension rules, the employee may pay more contributions, or start to pay contributions if the extra hours/pay puts the salary over a qualifying threshold. depending on scheme/rules, the employees contributions could be salary sacrifice and reduce the taxable and NI'able earnings, so less tax/NI paid if applicable. if the rate of pay is only the NMW or close, SS can't reduce pay to below NMW, so tax may be paid, and tax relief given by HMRC at the other end. she may be able to opt out of pension deductions, but that would usually affect future pension circumstances and often not considered a good option

    if there are things like student loans, or wage arrestments, payments may increase accordingly depending on the value being paid and the relevant thresholds

    also things like SMP and SSP can be affected by pay, the first 6 weeks SMP may be based on average earnings, if under thresholds then SMP and SSP may not be due, so if they are currently not earning enough for these, then the extra hours may provide additional entitlement to sickpay and maternity pay, depending on what occupational entitlements the employee is contractually entitled too

    generally speaking, unless benefits are being claimed, the more hours worked/paid, means more money taken home, and in the case of someone just under certain thresholds, they may then be entitled to sick pay, maternity pay and pension entitlements, whilst years of not paying tax/NI/etc could have an adverse effect in the long term

    if she can speak to someone in payroll they may be able to explain things better for her, and potentially give some modellilng calcs to show how much tax/ni/pension/etc may be deducted and how much the nett take home pay may be. the HMRC online calculators may also help, but they may not take into consideration pensions and benefits and other deductions, whilst other online calculators may do this, but will only give reasonably accurate figures if you provide the right info (ie. pensions) (edited)
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