Tax help with personal allowance used in one month

Question

I’m looking for some tax advice, I have recently finished university and am going into my new job from the start of September and getting paid on the 28th of the month, I haven’t worked at all this year so no tax has been run through me whatsoever. When I start I am going to be on a salary of £49,000 per year with a initial bonus of £12,000 which is being paid to me in one lump sum on the 28/09, along with my initial months pay. When I have had a job in the past I have never been taxed in the first month it has always been afterwards, but I have never earned my personal allowance in a single month. So my question is how much will I take home that first month and how will it affect my tax in the following months?

Answer 1

In September you will get £12,000 bonus + £4,083 pay, i.e. £16,083.

Assuming that you fill in the right forms to tell your employer that you have had no income so far this tax year, you will get the immediate benefit of the personal allowance from April to September inclusive, i.e. 6 months' worth, or £6,285. So you'll earn that much tax free.

You will also have a basic rate tax band of £19,000, so all the rest of your September pay will fit into that band and you'll pay 20% tax on it, so about £1,960.

In future months this tax year you'll just have the £4,083 pay and will have £1,047 of personal allowance, and will pay basic rate tax of about £607 on the rest as your total salary for the tax year will only be £36,500 which is under the basic rate limit.

In future tax years, your £49,000 salary will just about also fit within basic rate tax so the number will stay similar, if your salary doesn't change.

This is just income tax, you'll also have to pay NI, which is levied per pay period and not annually so there won't be any "carried forward" allowance to take advantage of, and will likely have deductions at least for pension, and possibly the cost of any benefits or the tax on them.