Are Working Tax Credits Paid On Earnings Before Or After Tax?

how is working tax credit worked out

Are Working Tax Credits Paid On Earnings Before Or After Tax?

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Just want to double check this.

If it is paid on earnings before tax, it looks like anyone who does slightly extra hours on a full time basis in order to help the employer out in busy times will lose their eligibility to get the tax credits.

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Quote:

Just want to double check this.

If it is paid on earnings before tax, it looks like anyone who does slightly extra hours on a full time basis in order to help the employer out in busy times will lose their eligibility to get the tax credits.

By my claculations, 40 hours a week is the safest maximum that can be worked if it is paid out on before

tax. If they pay you on what you earn after tax, that gives you more leeway in the hours worked, but then people have to predict how much extra they may earn by doing the extra hours etc.

They pay you accordingly until April following at which point they ask for your annual gross wage. If your income this year is lower than last year then they owe you money and you will probably get a lump sum. If your income is higher then you will owe them. They will either tell you to pay it asap, or they will take it off your next years tax credits (Which is what they do with me)

You can give them an estimated annual wage if you think there is going to be a significant drop/increase in your pay. They can adjust your tax credits accordingly.

Source: forums.digitalspy.co.uk

Category: Credit

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