How much tax comes out of my salary?
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 Income||Band Name||Tax Rate|
|Up to £11,850||Personal Allowance*||0%|
|£11,851 to £46,350||Basic rate||20%|
|£46,351 to £150,000||Higher rate||40%|
|Over £150,000||Additional rate||45%|
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 Income||N.I. Payment|
|Up to £8,164||0%|
|£8,165 to £45,032||12%|
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).