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Posted Wed, 27 Nov 2024 16:45:24 GMT by Conn5654
Hi, I receive an annual retention bonus of approximately £2500 each November. Also in November, we are being back-dated a pay rise that was due in April but subject to debate by the unions. My new annual salary as of this pay rise is £44711 p/a. To that end, my November pay is looking significantly larger than usual, but it has been taxed at what seems like an incredibly high rate - almost the entire bonus has gone in deductions, and my take-home is £1000 less than it was this time last year with the same bonus and without a pay rise. I've read some conflicting information here about whether this amounts to a tax refund in April or to reduced tax payments over the coming months when my pay packet will look significantly slimmer. Can anyone explain why exactly so much money appears to have vanished and what the process is moving forward?
Posted Tue, 10 Dec 2024 10:59:27 GMT by HMRC Admin 19 Response
Hi,
Any overpayment of tax that occurred when you received the one off large bonus payment in november, should start to be repaid back to you over the next few months once your pay drops back to a normal level, so long your tax code is on culmulative basis and not and emergency basis, so at the end of the tax year you should have paid the correct amount of tax.
Tax codes
You can use the following guidance to check the following months pay:
Estimate your Income Tax for the current year
Thank you.

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