BeatnicksBaton
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Salary Sacrifice and Annual Bonus Tax Relief
Hello, I get paid a gross salary of £60k plus an annual bonus of £5k paid in May and December (£2.5k each month) I would like to use salary sacrifice to bring my taxable income down to £50 to avoid going into the 40% bracket however I think that tax is calculated on a monthly basis of my gross salary so I don't receive the full tax relief. For example if my Gross is 60k and I need to reduce it by £833 per month to get down to 50K but the actual gross is 65k so I need to reduce by £1250 for £50k. On the monthly reducing it by £1250 seems to mean I only get 20% relief on the difference of £417 (£1250-£833) but is this then corrected at the end of the tax year and I will be able to get the full relief back? Thanks