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Where Taxpayers and Advisers Meet

Quartley Bonus or Monthly?

AZ2THEKB
Posts: 5
Joined: Thu Jan 18, 2018 3:17 pm

Quartley Bonus or Monthly?

Postby AZ2THEKB » Thu Jan 18, 2018 3:21 pm

Hello All,

My first time on this forum. Can someone be kind enough to tell me if I am better off as an employee on a Monthly bonus for performance (revenue earned for the business) or Quarterly?

I have been asked if I am happy to make this change, before I do i thought it prudent to ask someone who knows more than I do in this area.

Thank you so much in advance for your replies and consideration of this question.

BR
Azhar

AZ2THEKB
Posts: 5
Joined: Thu Jan 18, 2018 3:17 pm

Re: Quartley Bonus or Monthly?

Postby AZ2THEKB » Thu Jan 18, 2018 4:12 pm

to add to this, I do mean from a tax perspective, I am currently 1150L

Thanks

someone
Posts: 381
Joined: Mon Feb 13, 2017 10:09 am

Re: Quartley Bonus or Monthly?

Postby someone » Thu Jan 18, 2018 4:37 pm

Other than some quirks around the (tax) year end that the change takes effect (but you probably can't predict if this might matter) I don't think it makes the slightest bit of difference to the tax you'll pay.

But I'm no expert and I might be missing something.

AZ2THEKB
Posts: 5
Joined: Thu Jan 18, 2018 3:17 pm

Re: Quartley Bonus or Monthly?

Postby AZ2THEKB » Thu Jan 18, 2018 5:30 pm

Thank you so much! Would be good to hear from anyone who has further knowledge on this.

Greatfully

bd6759
Posts: 3100
Joined: Sat Feb 01, 2014 3:26 pm

Re: Quartley Bonus or Monthly?

Postby bd6759 » Thu Jan 18, 2018 7:54 pm

It makes no diference to the tax you pay. Tax is based on your annual earnings.

With a quarterly bonus it is possible that you pay slightly more tax than you need to when it is paid, but it evens itself out the next pay day. Whether you do or do not depends on how much your normal pay is. If your normal pay takes you into the 40% rate, then it makes no difference at all (unless the bonus takes you into the 45% rate).

robbob
Posts: 2818
Joined: Wed Aug 06, 2008 4:01 pm

Re: Quartley Bonus or Monthly?

Postby robbob » Thu Jan 18, 2018 9:01 pm

generally speaking i would say a quarterly bonus is more likely to achieve a saving compared to monthly, the saving would only be generated if there is more paid above the Upper earnings limit on this method compared to monthly the saving being 10% of the difference over the UEL's compared side by side. it is late so i may be missing something here - time for a beer methinks.

AZ2THEKB
Posts: 5
Joined: Thu Jan 18, 2018 3:17 pm

Re: Quartley Bonus or Monthly?

Postby AZ2THEKB » Thu Jan 18, 2018 9:57 pm

who said community is dead?! this experience has been a revelation to me!

Thank you so much everyone.

I feel much more informed to make an educated decision.

BR

JRG
Posts: 414
Joined: Wed Feb 03, 2010 4:40 pm

Re: Quartley Bonus or Monthly?

Postby JRG » Mon Jan 22, 2018 6:16 pm

As other have already said, there is no difference with regard to Income Tax, which is charged on an annual basis.
However, there could be a difference regarding National Insurance Contributions, which are charged on a monthly basis, depending on your actual monthly earnings.

AZ2THEKB
Posts: 5
Joined: Thu Jan 18, 2018 3:17 pm

Re: Quartley Bonus or Monthly?

Postby AZ2THEKB » Mon Jan 22, 2018 6:26 pm

Thank you.

I guess I will flight test for 2 quarters as we have been given that option and see the difference in the NI Contributions.

I will try and update my personal experience.

Thanks again


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