Two taxes are taken from your salary - Income Tax and National Insurance (N.I.)

Income tax, aka Pay As You Earn (PAYE), is charged as a percentage and applied in brackets - different percentages are applied to different portions of your money. You start paying 20% when you earn over £11,850 a year and 40% when you earn over £46,350, you can find a full table below.  

Income Tax Brackets:

Your IncomeBand NameTax Rate
Up to £11,850Personal Allowance*0%
£11,851 to £46,350Basic rate20%
£46,351 to £150,000Higher rate40%
Over £150,000Additional rate45%

On top of this you pay National Insurance. How is this charged? You pay nothing on first £157 a week, 12% on £157 to £866, and 2% on anything above this.  

National Insurance Brackets:

Your IncomeN.I. Payment
Up to £8,1640%
£8,165 to £45,03212%
Over £45,0322%

For example, if you earn £45,000 a year you'll pay £6,630 in income tax (20% of £45,000 minus £11,850) and £4,420 (12% of £45,000 minus £8,164).  

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