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How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 22 Apr 2018 | comments*Discuss
 
Tax Bands Paye Income National Insurance

In a life full of financial uncertainties, there is one thing that you can cling to as an absolute fact: the taxman will always be trying to take money off you. How much tax you have to pay, however, is dependant on a number of different factors.

National Insurance

In the first instance, it is important to recognise that there are two distinct payments which you will normally be required to make to the government. The first is National Insurance.

These are contributions that individuals make to the public purse, in order to guarantee their right to state-run welfare facilities. National Insurance is different from general taxation in several key ways: primarily, although levels of contribution are staggered, the access to benefits is not means tested. Furthermore, employers also make a contribution for each of their employees, based on the size of contribution being paid by the latter.

National Insurance contributions are divided into Classes, ranging from Class 1 to Class 4. If you are an employed person, you are likely to be required to make Class 1 contributions. This means that, if your gross wage is over the Earnings Threshold, currently set at £157 - £866 per week, you will pay 12% of your income in National Insurance Contributions, or NICs. Furthermore, if you earn over £866 per week, you will pay another 2% of everything you earn over that figure. As an employed person, it is the responsibility of your employer to pay your contributions out of your wage.

For the Self-Employed

If you are self-employed, the National Insurance system is slightly different. In this case, regardless of your income, you will pay Class 2 NICs at a flat rate of £2.85 per week. On top of this, you will be required to make Class 4 contributions of 9% of your income between £8,164 and £45,000. On earnings over this higher figure, you should be making contributions of 2%. You should also bear in mind that, if your income is less than £6,025, you can apply for a Small Earnings Exception, which exempts you from Class 2 contributions.

Income Tax

Aside from National Insurance, you will also pay income tax. Everyone has an annual non-taxable allowance of £11,500 (6 April 2017 to 5 April 2018). If you are employed, then you will pay tax on earnings over this allowance as follows: 20% up to £45,000, 40% between £45,000 to £150,001, and 45% on everything over £150,000. Your income tax will be automatically deducted from your wage if you are signed up to a PAYE scheme.

If you are self-employed, the income tax system operates slightly differently. In these cases, you will be required to fill in a Self Assessment, which involves giving details of all of your taxable earnings from the previous year. From this, HM Revenues and Customs will calculate how much tax you must pay. You will pay tax at the same rate as employed people; the difference is that your payments are not deducted as you earn.

Please note that these figures apply to the 2017-18 tax year.

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[Add a Comment]
jamie - Your Question:
I was employed from start of tax year to December. then went self employed. earnt 8000 from employed paye done tax and no. then self employed earnings was 6110 until end of tax year (before my 20percent tax deduction). Will I get some of that tax back im confused. done self employed for a whole tax year before on similar earnings and use to get some tax back

Our Response:
It usually tells you as soon as you fill in your tax return whether you are owed tax. The tax rebate you had initially may have been from your employed status.
MoneyExpertise - 23-Apr-18 @ 11:30 AM
I was employed from start of tax year to December.then went self employed. earnt 8000 from employed paye done tax and no. then self employed earnings was 6110 until end of tax year (before my 20percent tax deduction) . Will I get some of that tax back im confused . done self employed for a whole tax year before on similar earnings and use to get some tax back
jamie - 22-Apr-18 @ 1:25 PM
I haven't worked for over four years and I started a job on 19th March my tax code on pay slip is s1150L I'm due to get paid again on the 30th of April I should earn £1394 how much will I be taxed
Working mum - 20-Apr-18 @ 5:06 PM
Hi there. I am wondering how much you need to earn in 6 months (as I have a 6 month contract only) before paying tax and how much national insurance I would pay. All the websites only give a tax and N.I payment based on 12 months or weekly, however my weekly hours increase for 9 weeks in the summer which is why I cannot do a weekly calculation. Thank you
Tiffany - 20-Apr-18 @ 3:02 PM
Keeks08 - Your Question:
Can someone please advise. I am going to be working 3 days a week at 150 a day, around £21,000 a year. How much tax and national insurance will I expect to need to pay?? And I assume I need to hold this back in a bank account to make sure I can afford it at the end of the working year? I’m very very new to all this and would just like to know how much roughly all together I should be setting aside! Thank you

Our Response:
You don't say whether you are self-employed or not. If you are self-employed, please see the link here , which will explain further.
MoneyExpertise - 20-Apr-18 @ 9:26 AM
Snow - Your Question:
I am self-employed ,and my colleage too.I earned we earn similar and my accountant make me pay less than his accountant.I earned £ 20.000 a year and my colleage earned £26.000.My accountant made me pay to HRMC £1.600 and my colleage accountant made pay him £4.000 to HRMC.Can you tell me what is wrong here??

Our Response:
Much depends upon the expenses (outgoings) attributed to both businesses. Your colleague may have paid out less towards their business than you and therefore has had to pay more tax.
MoneyExpertise - 19-Apr-18 @ 12:30 PM
Can someone please advise. I am going to be working 3 days a week at 150 a day, around £21,000 a year. How much tax and national insurance will I expect to need to pay?? And I assume I need to hold this back in a bank account to make sure I can afford it at the end of the working year? I’m very very new to all this and would just like to know how much roughly all together I should be setting aside! Thank you
Keeks08 - 19-Apr-18 @ 8:31 AM
I am self-employed ,and my colleage too. I earned we earn similar and my accountant make me pay less than his accountant. I earned £ 20.000 a year and my colleage earned £26.000. My accountant made me pay to HRMC £1.600 and my colleage accountant made pay him £4.000 to HRMC . Can you tell me what is wrong here??
Snow - 18-Apr-18 @ 9:43 PM
Ledgy - Your Question:
Will I get a tax return if I’ve earned 85000

Our Response:
Only if you have paid too much tax the previous year.
MoneyExpertise - 17-Apr-18 @ 11:56 AM
TEDDY - Your Question:
If you work a 16 hour a week what would be the tax and national insurance amount on this. On 7.83 an hour?

Our Response:
You would have to work out your annual salary in order for us to tell you exactly what amount of tax and NI you would pay. However, if you earn under £11,850 for the year 2018/19, you would not pay any tax. You can see more regarding your NI via the link here.
MoneyExpertise - 17-Apr-18 @ 10:23 AM
Will I get a tax return if I’ve earned 85000
Ledgy - 16-Apr-18 @ 6:18 PM
If you work a 16 hour a week what would be the tax and national insurance amount on this. On 7.83 an hour?
TEDDY - 16-Apr-18 @ 12:29 PM
Chad- Your Question:
I've a tax code of 1100L and earned 500 pound over time before tax how much will be taking off the 500

Our Response:
The tax code 1100L was the most applied tax code in the UK for the 2016/17. You usually get a new tax code at the beginning of a tax year because of the changes in your personal allowance (which for 2018/19 is now £11,850). If you will earn over your annual personal tax allowance for 2018/2019, then you will pay tax of 20%.
MoneyExpertise - 13-Apr-18 @ 1:47 PM
Paul - Your Question:
Hi I’ve got 4 months of PAYE and 8 months self employed I’ve been paying tax for both of them and it’s under 11500 will I have to fill a tax return form in to get my tax back and also for 8 months I haven’t paid National insurance will I get a bill for this

Our Response:
You would have to speak to HMRC directly regarding this matter as much depends upon how your tax is being paid if you are self-employed. Plus, whether your NI is being paid on your behalf through PAYE.
MoneyExpertise - 13-Apr-18 @ 10:10 AM
I've a tax code of 1100L and earned 500 pound over time before tax how much will be taking off the 500
Chad - 12-Apr-18 @ 7:20 PM
Hi I’ve got 4 months of PAYE and 8 months self employed I’ve been paying tax for both of them and it’s under 11500 will I have to fill a tax return form in to get my tax back and also for 8 months I haven’t paid National insurance will I get a bill for this
Paul - 12-Apr-18 @ 10:26 AM
CT - Your Question:
I work employed as a teacher one day per week and do not pay tax on this. I am currently setting up my own coaching practice along side this and am not sure how much I need to save for tax/NI or what my tax rate is? Can you help??

Our Response:
You can see more via the gov.uk link here , which should tell you all you need to know.
MoneyExpertise - 6-Apr-18 @ 3:31 PM
Ab - Your Question:
Hi, I started working 2 weeks ago as self employed. My first pay cheque will be £1500 for the first month. How much tax would I pay each for this amount?

Our Response:
You would have to register for self-assessment if you are self-employed. Please see link here, which will explain all.
MoneyExpertise - 6-Apr-18 @ 2:36 PM
Travis00 - Your Question:
I have 2 small pensions adding up to £7,000 I also work a zero contract job sometimes only earning £60 a week. I have had 3 different tax codes this year now they are taking 40% tax off me my tax code is 345T now if I earn over 11,500 I will pay tax but surely it will only be 20%

Our Response:
The tax letter 'T' means HMRC needs to review some items with you, the employee directly. Therefore, I advise you to get in touch with HMRC as you are paying too much tax.
MoneyExpertise - 6-Apr-18 @ 12:38 PM
I started a new job week commencing 26 March 2018, as I am paid weekly and a week in lieu, turns out I was taxed 47.3% on £282 my wage for that week, but my tax to date is only £7000, well under the 1150L tax code, any idea why as payroll just enter the figures and it's calculated automatically
Brox - 6-Apr-18 @ 11:12 AM
jen - Your Question:
I earn 928.55 each month and I am under the tax income of 11500.00, but get taxed around £2.80 a month. Is this correct or can I claim that back. If so do I go through my employer or HMRC

Our Response:
Have a word with your employer first and then if you do not get a satisfactory response take it up with HMRC directly. If you are owed the money, you will get it back.
MoneyExpertise - 6-Apr-18 @ 10:36 AM
I earn 928.55 each month and I am under the tax income of 11500.00, but get taxed around £2.80 a month.Is this correct or can I claim that back.If so do I go through my employer or HMRC
jen - 5-Apr-18 @ 1:11 PM
Ceejaycee - Your Question:
I usually get paid ~£600 a month. From April 2017 to March 2018 I have been paid £8555 and have not been taxed. My next pay day is 10th April (next week) and I am looking to be paid £1000. will I be taxed? And if so does that mean I will be taxed until April 2019? My tax code is 1150L

Our Response:
1150L is the tax code currently used for most people who have one job or pension. You will not be taxed if you have earned less than £11,500 in the 2017/2018 tax year.
MoneyExpertise - 5-Apr-18 @ 12:36 PM
My company did not credit my salary for feb 2018 and Mar 2018. Both the months salary will be processed this week (Apr 2018 first week). I would have been not eligible for tax if I was paid by end of Mar 2018 since my two months salary does not fall in the slab to pay tax. Now when the salary is processed this week, will I have to pay tax for the two months salary?
Annie - 3-Apr-18 @ 3:23 PM
Ume Bilal - Your Question:
Hi, I am not alligibal for public funds but when I start working full time to help my family they stopped all benefits from my husband and I am also paying taxes as well. I just want to know if I start working with two different places how much hours I can work.

Our Response:
By law, you can’t work more than 48 hours a week on average - normally averaged over 17 weeks. However, you can choose to work more by opting out of the 48-hour week, please see link here .
MoneyExpertise - 3-Apr-18 @ 12:16 PM
I usually get paid ~£600 a month. From April 2017 to March 2018 I have been paid £8555 and have not been taxed. My next pay day is 10th April (next week) and I am looking to be paid £1000.. will I be taxed? And if so does that mean I will be taxed until April 2019? My tax code is 1150L
Ceejaycee - 3-Apr-18 @ 1:20 AM
Hi, I am not alligibal for public funds but when I start working full time to help my family they stopped all benefits from my husband and I am also paying taxes as well. I just want to know if I start working with two different places how much hours I can work.
Ume Bilal - 2-Apr-18 @ 5:02 PM
I work employed as a teacher one day per week and do not pay tax on this.I am currently setting up my own coaching practice along side this and am not sure how much I need to save for tax/NI or what my tax rate is? Can you help??
CT - 31-Mar-18 @ 9:03 PM
I have 2 small pensions adding up to £7,000 I also work a zero contract job sometimes only earning £60 a week. I have had 3 different tax codes this year now they are taking 40% tax off me my tax code is 345T now if I earn over 11,500 I will pay tax but surely it will only be 20%
Travis00 - 31-Mar-18 @ 12:22 PM
Hi, I started working 2 weeks ago as self employed. My first pay cheque will be £1500 for the first month. How much tax would I pay each for this amount?
Ab - 30-Mar-18 @ 6:24 PM
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Latest Comments
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    jamie - Your Question:I was employed from start of tax year to December. then went self employed. earnt 8000 from employed paye…
    23 April 2018
  • jamie
    Re: How Much Tax do I Have to Pay?
    I was employed from start of tax year to December. then went self employed. earnt 8000 from employed paye done tax and no. then…
    22 April 2018
  • Working mum
    Re: How Much Tax do I Have to Pay?
    I haven't worked for over four years and I started a job on 19th March my tax code on pay slip is s1150L I'm due to get paid…
    20 April 2018
  • Tiffany
    Re: How Much Tax do I Have to Pay?
    Hi there. I am wondering how much you need to earn in 6 months (as I have a 6 month contract only) before paying tax and how…
    20 April 2018
  • MoneyExpertise
    Re: A Guide to Unemployment Benefits
    sman - Your Question:Im on jsa and I went for an interview and passed but they said I have to fiil in a registered…
    20 April 2018
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    Keeks08 - Your Question:Can someone please advise. I am going to be working 3 days a week at 150 a day, around £21,000 a year.…
    20 April 2018
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    Snow - Your Question:I am self-employed ,and my colleage too.I earned we earn similar and my accountant make me pay less than…
    19 April 2018
  • Keeks08
    Re: How Much Tax do I Have to Pay?
    Can someone please advise. I am going to be working 3 days a week at 150 a day, around £21,000 a year. How much tax and national…
    19 April 2018
  • Snow
    Re: How Much Tax do I Have to Pay?
    I am self-employed ,and my colleage too. I earned we earn similar and my accountant make me pay less than his accountant. I…
    18 April 2018
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    Ledgy - Your Question:Will I get a tax return if I’ve earned 85000Our Response:Only if you have
    17 April 2018
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