Mracapulet
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National Insurance on Bonuses
Hi, As I understand it if I am in the basic rate tax bracket I pay 20% income tax and 12% NI, however if one month I receive a bonus which puts me over £4189 for that month, I pay 40% tax and 2% NI on everything above that. Assuming overall for the year I am still paid less than £50270, I then pay less income tax the following months to ensure that by the end of the tax year I've only paid 20% income tax. But as NI contributions are calculated monthly, not yearly, I don't pay any extra NI? Would I be correct in saying that the month I receive my bonus, everything I earn over £4189 I end up paying a combined income tax and NI of just 22%?