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How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 19 Feb 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]
Nathan - Your Question:
Can anyone help my previous question?

Our Response:
You would really have to contact them directly, please see link here , which will help you further.
MoneyExpertise - 19-Feb-18 @ 2:26 PM
Hi I get a bonus each month plus a wage weekly i am currently on 46k will my employee start deducting 40% tax from my wages automatically or will I get hit with a bill as I have been currently paying 20% ? thanks
alexis1 - 19-Feb-18 @ 11:42 AM
Can anyone help my previous question?
Nathan - 17-Feb-18 @ 10:33 PM
Jax - Your Question:
If I earn £82 a week, living in North Housing property how much rent and council tax do I pay

Our Response:
We cannot tell you how much council tax you would pay. This site is for income tax calculations only.
MoneyExpertise - 15-Feb-18 @ 10:35 AM
If I earn £82 a week, living in North Housing property how much rent and council tax do I pay
Jax - 14-Feb-18 @ 4:19 PM
I wasn't given a choice. And calling them is expensive per minute and your always on hold so don't know how.
Nathan - 10-Feb-18 @ 1:36 PM
@Nathan - why don't you just pay the £70 directly?
MissyT - 9-Feb-18 @ 2:39 PM
Darren - Your Question:
I earn 465 per month how much tax would they take of me also is this right I done 3 weeks before I got my first pay which By my hourly pay would be £296.25 I got payed after tax £223.11 they took of me £73.14

Our Response:
Unless you have earned over £11,500 this year to date, you would not be taxed on this amount. You should try to sort out your tax code with your employer. If you contact HMRC, you will be refunded the overpayment if you have indeed overpaid.
MoneyExpertise - 9-Feb-18 @ 11:36 AM
Hello. I owe the tax man £70 from last year(2017). They have said they will reduce my tax free earnings by £350 for me to pay them back by April 2018. I can't work this out. Why don't they just take the £70 rather than reduce my tax free earnings? Thanks
Nathan - 9-Feb-18 @ 6:52 AM
I earn 465 per month how much tax would they take of me also is this right I done 3 weeks before I got my first pay which By my hourly pay would be £296.25 I got payed after tax £223.11 they took of me £73.14
Darren - 9-Feb-18 @ 1:34 AM
Fi - Your Question:
Hi my basic wage is 1500 a month but I do extra hours when short staff which takes it up to 2000 but I pay 495 in tax and 275 in national insurance how can this be right

Our Response:
If you are earning £1500 per month you would pay £108 in tax. If you are earning £2,000 you would pay £208. HMRC have obviously got the wrong tax code. You would need to attempt to resolve this through your HR dept, or via HMRC directly. You should get the overpayment returned to you.
MoneyExpertise - 8-Feb-18 @ 1:57 PM
Hi my basic wage is 1500 a month but I do extra hours when short staff which takes it up to 2000 but I pay 495 in tax and 275 in national insurance how can this be right
Fi - 7-Feb-18 @ 9:27 PM
Hi, I recently took voluntary redundancy. I am not claiming benefits. I've been offered a private job only 6 hrs a week at £10 an hour. Do I have to inform the inland revenue, also how to i go about paying my national insurance. Having been in employment for 30yrs this is all new to me. Thanks.
k L G - 26-Jan-18 @ 2:48 PM
Mummyjojo- Your Question:
Hi. I am a mystery shopper. Making about £20 per month max!Once I did a good job making £86 per day for 10 days. £860.Do I have to declare anything?

Our Response:
All earnings are considered taxable and therefore should be declared to HMRC.
MoneyExpertise - 25-Jan-18 @ 10:17 AM
Hi. I am a mystery shopper. Making about £20 per month max! Once I did a good job making £86 per day for 10 days. £860. Do I have to declare anything?
Mummyjojo - 24-Jan-18 @ 2:04 PM
Foley87 - Your Question:
I'm working full time for a company and pay tax National Insurance a friend asked if I would like to earn some money and help him out would be looking at £200/£300 a week how much tax would I have to pay

Our Response:
We cannot estimate based on this information. We would have to estimate it on a specific total monthly or annual salary figure.
MoneyExpertise - 22-Jan-18 @ 11:00 AM
I'm working full time for a company and pay tax National Insurance a friend asked if I would like to earn some money and help him out would be looking at £200/£300 a week how much tax would I have to pay
Foley87 - 21-Jan-18 @ 12:34 PM
Hi, I returned from 7 years of working in Hong Kong. I have been unemployed since our return to UK in August. I have been living on my accrued savings and not claiming any state benefits. I wish to cash in a pension plan and have been told I will have to pay emergency tax on the surrender value. If for instance my plan was valued at 45K, how much cash am I likely to get back after all the taxes have been deducted.
Manxie58 - 20-Jan-18 @ 6:01 PM
Hi, I am in full time employment. Last October I did some consulting and earned £500. Do I need to declare this by January 31st.
Trout - 20-Jan-18 @ 2:20 PM
Tess - Your Question:
Do I have to pay tax if I only started self employed beginning October 2017

Our Response:
You would have to register as self-employed/self-assessment. Your first tax return for the year 2017 - April 2018 would need to be filled in and completed between April 5th 2018 and January 31, 2019.
MoneyExpertise - 12-Jan-18 @ 3:25 PM
Vps - Your Question:
I have just started self employed on 8th January, will I need to pay tax on my earnings till April if I don’t earn morn than 11,500 till then?

Our Response:
Once you register as self-employed, you will be requested to fill in a tax return. Your tax up until April this year will not be assessed until next April (19). You will still have to register what you have earned this year as a whole. However, if that amount falls below £11,500 in total, you will not be asked to pay any tax.
MoneyExpertise - 11-Jan-18 @ 11:50 AM
I have just started self employed on 8th January, will I need to pay tax on my earnings till April if I don’t earn morn than 11,500 till then?
Vps - 10-Jan-18 @ 4:30 PM
@Miklax - you have to include all your earnings, HMRC will calculate this on your behalf.
Jude - 9-Jan-18 @ 2:21 PM
Hi im self employer i have to includ the 11.500£ tax free on the self assement is well ??
Miklax - 8-Jan-18 @ 7:40 AM
Do I have to pay tax if I only started self employed beginning October 2017
Tess - 5-Jan-18 @ 8:50 AM
if my partner has 2 jobs, , in one of which she pays tax and NI on which is done at source by the company who pay her, and her second job pays just 380 per month, when she is calculating the amount of self-assessed tax she needs to pay on this second job does she need to include NI contributions ,as surely she is earning less than the threshold in this job, and she already pays NI in her other job?
deskpilot - 29-Dec-17 @ 12:30 PM
mowed - Your Question:
I paid tax at 40 percent one week bit I dont eveb earn over 38000 pound it was because I got a bonus and it looks like I could have will I get it back

Our Response:
You would have to speak to HMRC directly regarding this.
MoneyExpertise - 21-Dec-17 @ 11:25 AM
i paid tax at 40 percent one week bit i dont eveb earn over 38000 pound it was because i got a bonus and it looks like i could have will i get it back
mowed - 20-Dec-17 @ 2:03 PM
Currently I make about 1600.00 a month I will be receiving 600.00 a month in spousal support, can you tell me how much this will affect my taxes? I will be filling single not married no dependents and have no assets..
Baffled - 15-Dec-17 @ 9:25 PM
performer - Your Question:
I have just completed my first job abroad in Greece (April-October) earning £9,062.12, How much tax will I have to pay roughly, I have paid my NI as that has already come through.I am employed again now by a company and have stopped my self eployment.PLEASE HELP!

Our Response:
If you are self-employed and paying your taxes through UK HMRC, then much depends upon how much you will earn from October - April 2018. The current tax year is from 6 April 2017 to 5 April 2018. Your standard personal tax allowance for this period is £11,500, which is the amount of income you don’t have to pay tax on. Once you earn over this amount, then you will have to pay tax. However, if you are self-employed you will also be able to offset business outgoings and expenses to this amount which can effectively bring your self-employed earnings for the year down. When you complete your accounts for 2017/2018 next year, you will include the income from your current job in your annual figure/earnings. I hope this helps answers your question.
MoneyExpertise - 12-Dec-17 @ 9:35 AM
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