| So let's simplify the numbers a bit compared to the actual system: The tax rates for a single person will be: 30000 @ 20% remainder @ 50% You earn 40000. Your spouse earns 20000. Example 1: You are taxed seperately. Your employer takes 11000 of your gross and sends it to the government. Your spouse's employer takes 4000 of their gross and sends it to the government. Your total tax payment is 15000. Example 2: You opt in to join taxation. Your employers have no idea you are married, but the tax office does (because you sent them documentation to opt in for joint taxation). The government then assesses your tax as a couple and realises your joint income falls into the lower tax bound, and your tax should only be 12000, but you paid 15000. You get a refund of 3000. Example 3: Same as above, but you tell your employer. You can add up to min(26300, spouse's income) to your standard rate tax bracket. Your spouse needs to inform their employer to deduct the same from theirs. You tell your employer you are transferring 10000 from your spouse's tax bracket to yours. Your employer's payroll now works out your tax as 40000 * 20% = 8000. Your spouse's employer works out their tax as 20000 * 20% = 4000. You pay 12000 exactly. Example 4: Same as above, but only one of you informed your employer, you committed tax fraud, your employer filled out the form wrong, whatever. You get a tax bill for however much under your tax liability as a pair that your combined tax payments were. Example 5: Your income is 25000, your spouse's income is 25000. Regardless of whether you are assessed individually or seperately, your tax is 10000. Your employers deduct 5000 each. Of course, there's various tax credits you can apply for and you can inform your employer to deduct them from your payments or apply for them at end of year from the government. These can only decrease your tax bill, not increase it, so I'm not sure how you'd end up with an unexpected bill. There's also a higher base standard rate for married person to compensate for not being able to completely share your tax bands for the year (a measure intended to gain some extra tax income from couples with one high earning person and one person with a very small income, I guess). |