Income tax question

[zetec]

Hello all.

In my current employment I earn well below the higher rate tax banding. I did quite well last year and have earnt a significant bonus (around 1/5 of my annual salary), which will be paid in my March pay. This bonus will take my monthly pay well into higher tax rate, yet my ytd pay will be below the higher tax threshold. Will I get taxed at the higher rate or normal rate?

Thank you

[Beetnik]

Normal rate.

As it's March (last month of the tax year) you'll be assessed for tax on the whole of your year's earnings to date with no projection forward. So provided your 11 normal + 1 with bonus total is under the threshold for higher rate you'll be fine.

[zetec]

Thank you