Jump to content
Sign in to follow this  
Count Muppet

40,000 tax

Recommended Posts

I have heard that when you earn 40,000 you pay a higher tax but I can't find any info on it. I'm not at the stage where I am earning that much but probably could do if I done overtime. Does it work out better to earn 39,000 than 41,000? Or do you only pay the extra tax on earnings above 40,000?

Share this post


Link to post
Share on other sites

Basic tax rate 20% on annual earnings above the PAYE tax threshold and up to £34,370

Higher tax rate 40% on annual earnings from £34,371 to £150,000

Additional tax rate 50% on annual earnings above £150,000

Emergency tax code 810L

 

Taken from here.

 

http://www.hmrc.gov.uk/paye/rates-thresholds.htm

 

 

But if your are a director,pay yourself dividends then you only pay corporation tax on the dividends which is a lot lower.

I only earn 15,000 a year that is taxed but then get 20,800 in dividends.(£450 a week)

Share this post


Link to post
Share on other sites

Too be honest, I did see all those figures online but can't work it out. Maybe I should sit down and work it out. I want to do a bit of overtime to clear some bills but don't want to get into the situation where I work myself into more debt.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×