Income Tax on Bonus

bringitdown

Quick Q: How is income tax applied to a bonus?

Am in top bracket for tax, and have never gotten one before, just wondering what to expect when the cheque is cut.

Beano

if you are in the top bracket for tax then you will pay tax on it at the top rate. YOu will also have to pay prsi on it as well. basically it is treated as extra salary.

bringitdown

Darn, so most of it will go to the tax man.... cheers.

Stark

Your company might do options to help you escape the taxman's claws somewhat. For example, taxsaver commuter tickets or a contribution to your pension fund.

r3nu4l

Yep it sucks

A few years ago in the City (of London) bonuses were paid in 'hay'. This was because there was a tax-break on the purchase and sale of hay.
As a result and through complicated deals many top city stockbrokers and directors were owners of barns-full of hay on paper which when channelled through other schemes translated into tax-free cash in the order of millions

Don't expect your company to do this for you, mine didn't I had to take it on the chin

Pablo

those were the 'hay days' then I expect

r3nu4l

Pablo wrote:

those were the 'hay days' then I expect

*groan*