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Higher rate tax

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missrandom | 19:19 Tue 29th Apr 2008 | Business & Finance
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Hi, my husband has just got a new job with a much higher salary than before, and he's now going to be on higher rate tax. Could anyone tell me wether he will have to pay 40% on the whole of his wages or just the bit that goes over the threshold?
Thanks
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Just the bit over the threshold
First 5435 is tax free then its 20% up to 36000. Everything above 36000 is 40%
Question Author
oh thank you. I was really worried and thinking we wouldnt be much better off, but thats great. Thanks x
A lot of people think they will be worse off being higher rate tax payers but this isn't true. As an aside, as he is going to be a higher rate tax payer why not make sure he is paying what he can into his pension to get the most out of it? This way for every �100 going in, �40 is paid by his tax and �60 by him. Worth looking into.
Question Author
thats a good idea thanks I'll look into that. He's also able to buy shares and the company match what he buys, so we'll definately look into both of those things.
thanks

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