Why am I being taxed 32% according to my recent payslips?

[TwittleBee]

My past two pay slips show I’ve been taxed 32% , would anyone be able to help explain why this may be?

Pay for tax £6270
Tax deductions £2009
(NI at £399 and student loan at £360)

Came as a bit of a shock as was still on 20% this time last year.

Has your paye code changed?

Your taxable salary is well over £70k so a good proportion of that is taxed at 40%, which averages out at 32% for you.

If you have DC and aren't already losing CB due to a high earning partner, you will start to lose much of that too.

Sounds like you've had a big pay rise in the last year, if you don't need the extra money you could pay anything above £50k ish into a pension as you'll get 40% tax relief on it so s big boost to your pension.

https://www.thesalarycalculator.co.uk/salary.php

Have a look on here. It does appear you are being taxed too much?

Hard to say without knowing your tax code or whether you have been taxed on savings etc or underpaid tax in previous times.

I don't understand why you'd expect to get taxed at 20% on that salary. Are you in the UK or somewhere else?

You're a high earner - of course you should be taxed more

What’s your tax code?
are you Scotland?
is that your pay before or after tax? (As NI looks odd too)

You’re earning 75K so there’s no way if in England you’d only be paying 20% tax.

You're paying 20% tax on the first approx £50k of your salary and 40% on the rest. So it works out at 32% overall. You must know that on your salary you're a higher rate tax payer.

No the OP is looking at her total tax as a % of her pay, not the marginal rate. It would be about 20.% income tax on £65,000 (assuming OP has had a pay rise since)

That’s as maybe but what I’m saying is regardless whether total or marginal tax she is not going to only be paying 20% on that salary.

Ah okay, last year I was taxed at 20% until I hit the threshold for 40%.

These first two months are higher pay because last year’s commission was still reaching ancross these last two months.

I found it worked out well for me last year to be on 20% for first half of the year until I hit my commission target which landed same time as going over 40% threshold. Just spread the money out evenly rather than being paid less for the first half of the year. If that makes sense?

I am surprised at how it’s changed then for spread this year with no warning.

Was last year the first year you hit the 40% tax bracket?

Did you have a notification of your tax code changing? If not register for the HMRC portal and look on there.

The tax calculations will assume you will earn the same amount every paycheck. If that's not the case, the tax should be adjusted on subsequent payslips

Where did she say she shouldn’t

this

Hmrc tax you based on what they expect you to earn for the year as a whole. If you have higher pay at the moment they will assume thats going to continue. If it doesn't and your pay falls they will adjust it accordingly.

Without knowing @TwittleBee 's tax code we're in the dark.

Income Tax is applied cumulatively. So now, at the end of month two (May), the calculation will assume 'free pay' equal to two twelfths of your annual allowance.

The next portion will be taxed at 20% but if your cumulative pay is more than two twelfths of the 20% band then what's left over will be taxed at 40%.

Check your tax code. You may have underpaid last year or have taxable benefits?