Your income is allocated to the earnings bands, first salary then other income. Income is taxed at the rate corresponding to the earnings band.
For example, a salary of £24,000 has a personal allowance of £12,570 leaving £11,430 to be allocated to the standard rate band. Salary in this band is taxed at the 20% income tax rate.
The standard rate band is £37,700 of which £11,430 has been allocated to salary, as above, leaving £26,270 to be allocated to other income.
Additional salary would be taxed at 20% until all the remaining standard rate band of £26,270 has been allocated. Any more salary would be taxed in the next income band at the higher rate of 40%.
Salary sacrifice is available for additional pension contributions in place of salary. You may receive other fringe benefits, which are of value to you, instead of salary, provided the items meet the HMRC Tax Guide 480 for employee expenses and benefits. There is provision for employment-related loans, generally known as staff loans, within specified criteria. CMHQ will be pleased to advise on individual cases.
For example, a salary of £24,000 has a personal allowance of £12,570 leaving £11,430 to be allocated to the standard rate band. Salary in this band is taxed at the 20% income tax rate.
The standard rate band is £37,700 of which £11,430 has been allocated to salary, as above, leaving £26,270 to be allocated to other income.
Additional salary would be taxed at 20% until all the remaining standard rate band of £26,270 has been allocated. Any more salary would be taxed in the next income band at the higher rate of 40%.
Salary sacrifice is available for additional pension contributions in place of salary. You may receive other fringe benefits, which are of value to you, instead of salary, provided the items meet the HMRC Tax Guide 480 for employee expenses and benefits. There is provision for employment-related loans, generally known as staff loans, within specified criteria. CMHQ will be pleased to advise on individual cases.