03
Jul
2019
A question about : How much National Insurance do I pay on my lump sum?
Hi,
I understand that the first Ј30k is tax free and that the rest is taxed as usual. Am I right that NI is calculated on the taxable amount as normal too?
For example, Assuming I would receive a Ј65k lump sum on 6th April Ј30k would be tax and NI free leaving Ј35k which would be taxable. According to this link https://www.listentotaxman.com/35000 I would be due to pay Ј5000 tax and Ј3245.28 in National Insurance
Have I worked this out right or is there an exemption on NI on redundancy?
Regards
P
Best answers:
- No exception for the excess. Depending on when you start a new job you may have personal allowances left
- No NI on compensation payments just the tax.
If in the new tax year you may find the initial tax much higher than expected as it is not calculated on the annual basis.
Look at P50.
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