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Income Tax Question

sparkymark75

Well-known Member
I have private health insurance through my employer. As a result, my tax code is reduced so that I pay the appropriate amount of tax on this.

Now, does this mean that in theory, if I then earn more that year than was expected (via OT, salary increase, etc), I will have paid too much tax?

Looking at my P60, it looks like I've paid the correct amount of tax for the gross salary I earned. However, this was based on a tax code which was lower than normal.
 

booyaka

Moderator

tonycommander

Well-known Member
I have private health insurance through my employer. As a result, my tax code is reduced so that I pay the appropriate amount of tax on this.

Now, does this mean that in theory, if I then earn more that year than was expected (via OT, salary increase, etc), I will have paid too much tax?

Looking at my P60, it looks like I've paid the correct amount of tax for the gross salary I earned. However, this was based on a tax code which was lower than normal.


Errr, you are taxed on all income... so if you earn more, you will pay more tax.

if you earn less, you will pay less tax each month.

your tax code is the ammount of money you are allowed to earn before you pay tax.
 

russ123

Active Member
Your tax code reflects your personal allowance ie the amount of money you are amount to earn before tax. It is not applied as a percentage. So if you normally could earn say 10k before paying tax per year but your insurance is worth 1k then your tax code would reflect the adjustment to 9k that you are allowed to earn before paying tax.

Often the number part of your tax code is the amount before tax minus a zero at the end so in the above you might have 900L as the resulting code.

So as long as the insurance cost stays the same, it wont matter if you earn anymore.
 

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