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How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 21 Sep 2017 | 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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Moved back to the U.K. Last November. My only income is a Swiss pension paid monthly, about £3000 at present exchange rate. Please help to estimate how much tax I will have to pay. I receive no UK pension and have no other revenue.CAT
Swissone - 21-Sep-17 @ 8:38 PM
Hey, I've just been paid for my first month at work. I earned just over £1,700 and was taxed £146 and £123 NI. This seemed incredibly high although my tax code is 1150L. My net pay was just over £1.400. Since I'll only be working 8 month of the tax year will my allowance be around £766 or is the allowance taken from your earnings from April to April? Thanks in advance
Working mummy - 20-Sep-17 @ 8:23 AM
Mel- Your Question:
I got a self assessment for April 2015 to April 2016 and I appear to not have paid any tax on the 2 employments I had over this period. I earned 10,44.55 from one employer and 1,922.13 from another. What tax am I looking to pay back for this as I did not know I had not payed any at all. HELP!

Our Response:
The annual personal tax allowance for 2015/16 was £10,600, if you earned £12,362 you would only pay tax on £1762. If you are self-employed, then you may be able to offset some if not all of this to expenses (if you have to do a self-assesment form). The ‘basic rate’ of tax in the UK is 20%. If both of your employers have not paid tax on your behalf, you may wish to find out why.
MoneyExpertise - 19-Sep-17 @ 12:44 PM
@harey2805 - it's swings and roundabouts. If she wants more take-home pay then self-employed means she will be able to fill in her own tax return and offset any expenses against any tax she may have to pay over her annual tax allowance of £11,500. But, if she is self-employed she won't get paid annual leave etc and all the benefits that go with being employed. If she earns a flat £330 per week across £52 weeks per year, then she'll only pay £16 a week tax. I think I personally (for job security reasons) would opt for the PAYE as she'll get paid holiday and sickness pay. She would get neither if she goes self-employed, neither would she be eligible for redundancy pay if she's self-employed. As a rule self-employer contractors are paid more than PAYE workers as they don't have any PAYE perks.
MaxL - 18-Sep-17 @ 3:41 PM
I got a self assessment for April 2015 to April 2016 and I appear to not have paid any tax on the 2 employments I had over this period. I earned 10,44.55 from one employer and 1,922.13 from another.What tax am I looking to pay back for this as I did not know I had not payed any at all. HELP!
Mel - 18-Sep-17 @ 2:28 PM
My wife (40) is working 2 days a week for £150 a day. She is also likely to be required for about 20 additional days throughout the year at the same rate. Is it better to be paid as an employee under PAYE or as a self employed freelancer? Which one gives more take home pay after tax and national insurance?
harey2805 - 16-Sep-17 @ 12:50 PM
Leeh123 - Your Question:
Hi I work seasonal so I do a lot of hours and through June, July and august I've been getting paid around £570 a week but being taxed around £70 and NI £50. Should I be getting taxed that much since I have an allowance? Thanks

Our Response:
Yes, this sounds about right for both tax and NI.
MoneyExpertise - 15-Sep-17 @ 1:43 PM
Bliss- Your Question:
Hello am planning to take up a job that pays 15,000 per annum and that would be all of my income, how much tax and NI will be deducted?

Our Response:
You would pay approximately £58 income tax per month.
MoneyExpertise - 12-Sep-17 @ 4:04 PM
Hi there, I'm a couple, but it's just me that works 20 hours per week, I'm wanting a second job to tame my hours up to 24, so we can claim working tax credits, just wondering if I'd have to pay any tax or NI, if so do you know how much? Many thanks
Bex - 12-Sep-17 @ 3:02 PM
Hello. I'm paying tax on my employed part time job. If I do more hours self employed earning £720 annually how much tax and insurance would I be expected to pay? Also do they take into account the tax and insurance paid on my employed work? Many thanks
Katy - 12-Sep-17 @ 12:28 PM
Hello am planning to take up a job that pays 15,000 per annum and that would be all of my income,how much tax and NI will be deducted?
Bliss - 12-Sep-17 @ 7:57 AM
happygal - Your Question:
Hi if I earn 300 a week how much NI and tax would be deducted from my pay. Thanks.

Our Response:
Based upon you earning this across 52 weeks of the year and your annual salary being £14,000, you would pay £48 per month in tax and £62 NI.
MoneyExpertise - 11-Sep-17 @ 2:10 PM
Kirsty1234 - Your Question:
Hi I'm earning approx £200 a week from my business. So as self employed and also working a full time job less than the taxable amount earned each year what tax should I be paying weekly or per monthly for my 200 earnings from my business.

Our Response:
Your earnings from your business are treated as self-employed earnings and therefore are taxed differently from your PAYE job, as some of those earnings can be offset by expenses when you fill in your tax return. Therefore, it is impossible to say what amount of tax you may pay on your business, which is treated separately to your job.
MoneyExpertise - 11-Sep-17 @ 1:44 PM
Hi if I earn 300 a week how much NI and tax would be deducted from my pay. Thanks.
happygal - 10-Sep-17 @ 6:08 PM
Hi I'm earning approx £200 a week from my business. So as self employed and also working a full time job less than the taxable amount earned each year what tax should i be paying weekly or per monthly for my 200 earnings from my business..
Kirsty1234 - 10-Sep-17 @ 4:01 PM
Hi i work seasonal so I do a lot of hours and through June, July and august I've been getting paid around £570 a week but being taxed around £70 and NI £50. Should I be getting taxed that much since I have an allowance? Thanks
Leeh123 - 8-Sep-17 @ 12:21 PM
Shazzy - Your Question:
Hi,employer has paid me 5 weeks pay,how much tax should be paid on 1393.21 please

Our Response:
Is this a PAYE contract? If so your employer will pay tax on your behalf. If this is the case you may be taxed with an emergency code. If you have a wage slip, the details will be included. We cannot give a figure here as much depends upon what other income you have earned over the year etc.
MoneyExpertise - 8-Sep-17 @ 11:50 AM
Vicki- Your Question:
Hi, if I earn less than £11500 per year, ,952 per month, am I exempted from National Insurance as well as income tax or just income tax? Also what percentage of NI and income tax would I have to pay ?Thanks

Our Response:
You would pay £33 per month in National Insurance contributions. You are exempted from paying tax.
MoneyExpertise - 7-Sep-17 @ 3:06 PM
Hi,employer has paid me 5 weeks pay,how much tax should be paid on 1393.21 please
Shazzy - 7-Sep-17 @ 12:24 PM
Hi, if I earn less than £11500 per year, ,952 per month, am I exempted from National Insurance as well as income tax or just income tax? Also what percentage of NI and income tax would I have to pay ? Thanks
Vicki - 5-Sep-17 @ 7:30 PM
LJ - Your Question:
HI, When I fill in my total earnings as a sole trader which is for 15'-16' around 12,000 GPB. Do I deduct the 11,000 GPB that is not taxable of myself ? or do I put in the total amount earned?

Our Response:
You would put in the total amount earned, HMRC will automatically deduct this for you.
MoneyExpertise - 5-Sep-17 @ 10:45 AM
HI, When I fill in my total earnings as a sole trader which is for 15'-16' around 12,000 GPB. Do i deduct the 11,000 GPB that is not taxable of myself ? or do i put in the total amount earned?
LJ - 4-Sep-17 @ 5:09 PM
MaryQ - Your Question:
Iam not contracted, self employed. I intend to earn less than £11000 threshold. I do not work set hours or have a regular schedule. I would like to have a discussion with employers about travel expenses. My understanding is that travel expenses incurred would be recovered by tax relief however not expecting to pay tax, your guidance would be helpful, thankyou.

Our Response:
If you’re self-employed, your business will have various running costs. You can deduct some of these costs to work out your taxable profit as long as they’re allowable expenses, please see link here .
MoneyExpertise - 1-Sep-17 @ 11:21 AM
Iam not contracted, self employed. I intend to earn less than £11000 threshold.I do not work set hours or have a regular schedule.I would like to have a discussion with employers about travel expenses. My understanding is that travel expenses incurred would be recovered by tax relief however not expecting to pay tax, your guidance would be helpful, thankyou.
MaryQ - 31-Aug-17 @ 6:10 PM
rina - Your Question:
If I get £1,200/month how much I have to paid tax?

Our Response:
You should pay approximately £48 per month tax, based upon this as your annual income.
MoneyExpertise - 29-Aug-17 @ 10:30 AM
if i get £1,200/month how much i have to paid tax?
rina - 27-Aug-17 @ 8:20 AM
hello! I start my first ever full time job on 4th september and I've just turned 18 too. Im just curious on how much tax I would have to pay monthly. My monthly wage should be £1,008 a month, so how much tax money would come out of this?
laurenjane345 - 16-Aug-17 @ 3:47 PM
how much do i pay in tax if i earn 570 a month but pls bare in mind this is my first and last pay from this company as im moving jobs
Andrew Phillips - 15-Aug-17 @ 2:55 PM
How much should just repay through my income tax if I owe£2y00
Vklla - 14-Aug-17 @ 3:09 PM
Hello, I have worked out my taxable income at £60 per week after £11000 per year threshold. How much tax and NI am I likely to be paying please?
jess - 12-Aug-17 @ 9:32 PM
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Latest Comments
  • Swissone
    Re: How Much Tax do I Have to Pay?
    Moved back to the U.K. Last November. My only income is a Swiss pension paid monthly, about £3000 at present exchange rate.…
    21 September 2017
  • Working mummy
    Re: How Much Tax do I Have to Pay?
    Hey, I've just been paid for my first month at work. I earned just over £1,700 and was taxed £146 and £123 NI. This seemed…
    20 September 2017
  • MoneyExpertise
    Re: A Guide to Unemployment Benefits
    Erbie - Your Question:Hi I'm starting my own business and I am still employed full time if I was to leave my current…
    19 September 2017
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    Mel - Your Question:I got a self assessment for April 2015 to April 2016 and I appear to not have paid any tax on the 2…
    19 September 2017
  • MaxL
    Re: How Much Tax do I Have to Pay?
    @harey2805 - it's swings and roundabouts. If she wants more take-home pay then self-employed means she will be able to fill in…
    18 September 2017
  • Mel
    Re: How Much Tax do I Have to Pay?
    I got a self assessment for April 2015 to April 2016 and I appear to not have paid any tax on the 2 employments I had over this…
    18 September 2017
  • Erbie
    Re: A Guide to Unemployment Benefits
    Hi I'm starting my own business and I am still employed full time if I was to leave my current employment to pursue my…
    16 September 2017
  • harey2805
    Re: How Much Tax do I Have to Pay?
    My wife (40) is working 2 days a week for £150 a day. She is also likely to be required for about 20 additional days throughout…
    16 September 2017
  • MoneyExpertise
    Re: A Guide to Unemployment Benefits
    Pat - Your Question:My hours are shortly to be cut to 16 (2 days) per week. I am 63, married and a home owner with no…
    15 September 2017
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    Leeh123 - Your Question:Hi I work seasonal so I do a lot of hours and through June, July and august I've been getting paid…
    15 September 2017
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