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How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 8 Oct 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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Im on 420 a week i am 22 years old working on a temp contract what tax will i have to pay
Knobeyes - 8-Oct-18 @ 8:18 AM
I currently have two jobs and have just had my first pay check from my second job with the tax code BR (there was no W1 or M1) will this bak occur every month or is it just one off?
erin - 2-Oct-18 @ 6:20 PM
I’m getting paid 14k a year and I’m 16 years old, how much tax will I pay
Aim - 25-Sep-18 @ 5:08 PM
I earn £50k a year in full time employment, last year I also made an additional £800 through other work, do I need to fill in a self assessment for the £800?
GREENY483 - 18-Sep-18 @ 3:38 PM
Can i have a quastion? From this days i paid my tax every month i paid 70 pound. Now my boss told my i need to pay every week same 70 pound so that is together 280/month that is alright? I dont think so
Soldier93 - 16-Sep-18 @ 11:19 PM
Lora - Your Question:
Hi, My contract with my employer is through a freelancing website. Does this mean that I'm "employed" and not "self-employed"? Also, once I hit the £11,500 mark do I ONLY pay tax on the amount I earn over that? Or do I have to pay tax for everything that I earned before?Thanks

Our Response:
If you are freelancing it means you are self-employed and therefore you would fill in your own tax return. If you are self-employed you would not be eligible to pay tax on your earnings until you submit your tax return in the following tax year. The link here will tell you more.
MoneyExpertise - 13-Sep-18 @ 9:58 AM
Hi, My contract with my employer is through a freelancing website. Does this mean that I'm "employed" and not "self-employed"? Also, once I hit the £11,500 mark do I ONLY pay tax on the amount I earn over that? Or do I have to pay tax for everything that I earned before? Thanks
Lora - 12-Sep-18 @ 11:34 AM
Hi, I have earned £15,000 in this current tax year and have paid £2100 tax as PAYE; I am now switching to self employed. Will I get taxed at 20% for any self employed earnings between now and the end of the tax year, or will they deduct the tax I have already paid?
James - 7-Sep-18 @ 7:13 PM
LJ256 - Your Question:
Hi, I do 20 hours per week at minimum wage which equates to around 150 a week however I’ve been getting taxed on this is that how it should be or am I owed that money back. As from what I’ve gathered I shouldn’t need to pay tax as I only rlly earn approximately 8,000 a year when the threshold is 11,000. It would be helpful if I could know any contact info so I can find out.

Our Response:
You can either speak to your employer directly or contact HMRC to change your code, please see the link here.
MoneyExpertise - 4-Sep-18 @ 3:13 PM
Hi, I do 20 hours per week at minimum wage which equates to around 150 a week however I’ve been getting taxed on this is that how it should be or am I owed that money back . As from what I’ve gathered I shouldn’t need to pay tax as I only rlly earn approximately 8,000 a year when the threshold is 11,000. It would be helpful if I could know any contact info so I can find out.
LJ256 - 3-Sep-18 @ 12:23 PM
I work 18 hours a week and it’s 8.67 a hourwill I get tax
Pdavis - 24-Aug-18 @ 6:15 PM
I'm currently temping and am earning£1200 per month. However from April til the end of July my total earnings are less than £2000 as I was working 8 hours a week. As such my the end of the tax year my total earnings should be £10,400 which less than the personal allowance, The figure will probably be less as I'm planning on going travelling in February. However as I currently get paid over £221 per week I am getting taxed. Do I have any case for a rebate, or changing my tax code?
Ellen - 22-Aug-18 @ 12:22 PM
I'm working 10hrs a month at £7.38 but only coming out with £48.00a month is this due to tax ?
Loz - 20-Aug-18 @ 10:43 AM
sunshine - Your Question:
I was unemployed for years. I am now working 34 hours a week and take home £1256.00. I am doing overtime and only just surviving. Once I go over 11,500 I will get taxed. how much will I be taxed if im still doing an extra £215.00 on top of my mnthly salary of £1240.00

Our Response:
You will get taxed at 20% on all money earned over £11,850.
MoneyExpertise - 17-Aug-18 @ 12:56 PM
Kdh2012 - Your Question:
Hi there, I have a part time paye job totalling about £11000 a year, im also now self employed but only earning about 100 max 200 hundred a month.what tax and ni will I pay on the self employed work?

Our Response:
You would have to register for self-assessment in order to ascertain how much you would have to pay. With self assessment you can claim certain costs and expenses which can be offset against income. Therefore, it is impossible to say how much tax you would pay, except to say you would pay 20% on any self-employed income once outgoing costs have been calculated.
MoneyExpertise - 17-Aug-18 @ 10:53 AM
Hi there, i have a part time paye job totalling about £11000 a year, im also now self employed but only earning about 100 max 200 hundred a month...what tax and ni will i pay on the self employed work?
Kdh2012 - 16-Aug-18 @ 10:30 PM
GR4HM - Your Question:
Ive just started a new job as a labourer so im employed and earn 200 a week will I have to pay tax?

Our Response:
If you are on an annual salary of £9,600 you would not have to pay tax. You can earn up to £11,850 before you are eligible.
MoneyExpertise - 10-Aug-18 @ 10:59 AM
ive just started a new job as a labourer so im employed and earn 200 a week will i have to pay tax?
GR4HM - 9-Aug-18 @ 6:01 PM
Hi, I earn £22,000 a year before tax £16,000 after tax and needed some extra money for house etc repairs and debts so cashed in a pension I received £29,000 lump sun which was taxed at source so I received £22,000 net. Now the inland revenue want an extra £1,400 in underpaid tax because my gross income was over £40,000 they want to deduct extra tax each month for a year which will leave me extremely short of money each month. Is there anything I can do about this?
Ivy - 3-Aug-18 @ 11:04 AM
Lisa- Your Question:
HelloI work 26 hours a week £7.83I don’t get taxed as I earn £10,580.I have been over time recently covering holiday which I believe will take me over.When do they start taxing me is it after my earnings hit the amount to be taxed Thanks

Our Response:
If you have never previously earned above the £11,850 annual tax allowance amount you will get taxed when you hit above the £11,850 mark. However, you will only get taxed 20% on anything you earn above that amount.
MoneyExpertise - 2-Aug-18 @ 2:41 PM
Hello I work 26 hours a week £7.83 I don’t get taxed as I earn £10,580. I have been over time recently covering holiday which I believe will take me over. When do they start taxing me is it after my earnings hit the amount to be taxed Thanks
Lisa - 31-Jul-18 @ 6:32 PM
I was unemployed for years. I am now working 34 hours a week and take home £1256.00. I am doing overtime and only just surviving. Once i go over 11,500 i will get taxed. how much will i be taxed if im still doing an extra £215.00 on top of my mnthly salary of £1240.00
sunshine - 29-Jul-18 @ 8:42 PM
Bronia - Your Question:
Hi,I am currently working 24 hours a week on a temporary 2 month contract. I am earning £258 a week. Will I still be taxed on this income, even though it is only a two month contract?

Our Response:
Unless you have earned over £11,850 currently in this tax year, you shouldn't be taxed.
MoneyExpertise - 27-Jul-18 @ 12:01 PM
Hi, I am currently working 24 hours a week on a temporary 2 month contract. I am earning £258 a week. Will I still be taxed on this income, even though it is only a two month contract?
Bronia - 26-Jul-18 @ 9:56 AM
My tax code is 1185L I earn £7.83 an hour and work 30 hour weeks, so on normal 4 week months I don't get taxed, but in a 5 week month I will earn more than normal. I was wondering if I will get taxed on those months?
Jonny - 23-Jul-18 @ 6:10 PM
Kev - Your Question:
Hi, let's say a person's salary is £36,000 gross pa and they get taxed to a net of £28,800 on the 20% rate, if a promotion takes them to £45,000 gross pa their net would be £27,000 at 40%. This indicates the promotion would not be financially worth taking, due to the actual wage decrease for the extra tax, despite the £9000 annual pay rise. Is this accurate or am I misunderstanding something in the process?

Our Response:
All earnings over the higher rate limit is charged at 40% tax. Under that limit, you will be charged at 20% after the annual personal tax allowance. Otherwise, as you say it would not be worthwhile getting a promotion.
MoneyExpertise - 23-Jul-18 @ 1:55 PM
Hi, I am in the middle of litigation and working out my self employed loss of earnings ( I am a graphic designer) I have worked out the gross loss of earnings @£525 a week, over 26 weeks, totals £13,650. I understand that I need to give the net earnings as part of my compensation but I am struggling with the calculations. 1. Do I deduct the £11,500 for personal allowance from the gross figure leaving £2,150 then apply class 2 N.I contributions? or; 2. Do I deduct 9% from the gross figure for N.I which is £1228.50 which then leaves a total of £9937.20 and then calculate the 20% for tax? Hope this makes sense Thanks again
Miyah_Toni - 22-Jul-18 @ 8:27 PM
Hi, let's say a person's salary is £36,000 gross pa and they get taxed to a net of £28,800 on the 20% rate, if a promotion takes them to £45,000 gross pa their net would be £27,000 at 40%. This indicates the promotion would not be financially worth taking, due to the actual wage decrease for the extra tax, despite the £9000 annual pay rise. Is this accurate or am I misunderstanding something in the process?
Kev - 22-Jul-18 @ 3:48 PM
If I am a free lancer ( self employed ) I'll earn 9k for my7 months I'll work Will I get taxed ?
Sian - 20-Jul-18 @ 6:33 PM
If I’m working part time and I get paid £7.38 per hour and I work a 10 hour shift with no breaks and I get paid £47.35 is this due to tax? Ps I’m 18 years old
Appiah04 - 20-Jul-18 @ 9:22 AM
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