Taxable Bonus

littlejp

The company I work for changed ownership 2 weeks ago.
The outgoing owner agreed to give each employee a "redundancy" payment even though we are continuing employment with the new owners.
This payment is more like a bonus and was taxable.
I am only working 2 days a week at the moment so have been paying very little tax this year.

In the middle of March when the sale was being finalised, old boss gave me a payslip with pay up to that day and including the bonus payment. I was taxed at 41% on this. I was expecting this.

Last week I got paid by the new employer, same rate as old employer, same date etc. but I again was taxed 41% on this.

Am I right in thinking that this is because it is the same month as the larger payment?

Should I be back to normal tax rates in next months pay check?

If I am due some of this tax back will it be at the end of the year or how does this work?

I know Revenue could tell me all of this but I don't have much time to call them during the day so was hoping some people on here might be knowledgeable of this type of stuff.

Thanks

Citizenpain

are you paid monthly ?

If so it shold be refunded to you over the course of the year

littlejp

Citizenpain wrote: »

are you paid monthly ?

If so it shold be refunded to you over the course of the year

Yep. Paid monthly.
So should I expect 1/9th of it back each month until the end of the year, presuming I keep working only 2 days.

Citizenpain

not necessarily --- it depends on how much of a tax band at the lower rate you have unutilised every month normally - you might get it back quicker

littlejp

Citizenpain wrote: »

not necessarily --- it depends on how much of a tax band at the lower rate you have unutilised every month normally - you might get it back quicker

Brilliant. Thanks for your reply. Was worried I was gonna be taxed at 41% for a few months.

Legend100

littlejp wrote: »

Brilliant. Thanks for your reply. Was worried I was gonna be taxed at 41% for a few months.

Just a note - you could well be.

Will all depend on your cumulative earnings to date. Check your latest payslip for cumulative figures.

There should also be a monthly cut off figure (sorry been a while since I've seen a payslip so cannot remember what this is normaly called on it). Now add this figure to your cumulative earnings to date

If the sum of the above two is greater than your cumulative earings year to date plus your expected gross pay for the next period, you will again be taxed at 41%.

It all really depends how large your bonus was (especially as it is still early in the year so less unused band built up)

hope that isn't too confusing!

littlejp

Legend100 wrote: »

Just a note - you could well be.

Will all depend on your cumulative earnings to date. Check your latest payslip for cumulative figures.

There should also be a monthly cut off figure (sorry been a while since I've seen a payslip so cannot remember what this is normaly called on it). Now add this figure to your cumulative earnings to date

If the sum of the above two is greater than your cumulative earings year to date plus your expected gross pay for the next period, you will again be taxed at 41%.

It all really depends how large your bonus was (especially as it is still early in the year so less unused band built up)

hope that isn't too confusing!

No, not too confusing. Bonus wasn't particularly big and I have only been working 2 days a week all year so wouldn't imagine I have used up much credits.

Will have a look at a payslip when I can.

Thanks