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Tax on a backdated pay rise
A backdated rise is taxed like back pay: through payroll when paid.
A backdated rise is paid as back pay and taxed in that pay period, at your marginal rate (the rate on your next euro). A large lump of back pay can cross into the 40% band in one month. If it does, the cumulative basis and an end-of-year review usually even it out.
Work it out
Terms: Cumulative basis
All payslip topics · General information, not tax advice.