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How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 27 May 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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[Add a Comment]
Hi, I'm being taxed even though I'm on a 1150L tax code. My workplace is saying that I'm currently earning too much a week and have to pay that and that they will refund it me when I earn less. I'm earning (300-400) per week but only because it's summer holidays and I'm off uni. Last year I eat 6900 as a total. Isn't it illegal to tax me until I go over th 11000
Will - 27-May-17 @ 12:12 AM
brandy - Your Question:
I am 64 years old and I do 10 hours a week for £80 a week and my tax out of that is £12-60.That to me is a lot of money to pay in tax for what I get or is it.

Our Response:
You only pay income tax if your taxable income - including any private pension, state pension and employment is more than your annual personal tax allowance of £11,500. If you are earning less than this amount annually, then you would need to speak to HMRC directly in order to claim back any overpayment and put right your tax code.
MoneyExpertise - 25-May-17 @ 1:57 PM
I am 64 years old and I do 10 hours a week for £80 a week and my tax out of that is £12-60. That to me is a lot of money to pay in tax for what I get or is it.
brandy - 19-May-17 @ 7:48 PM
I've recently changed tax codes in work. My first wage was £400.13 how much should I pay for tax and NI on this.
Anza - 15-May-17 @ 12:24 AM
Hi. I have two different jobs. The main job i earn 21.600 a year. And the part time job I earn around 4000 a year. So they changed my tax codes since April this year that means in my full time job my tax code is OT who means is not correct rigth? Cause I think everyone as 11500 a year tax free amount is that rigth? And my part time jobs my code is now D1 where I'm paying now 45% of my ears to tax. I don't know if that's it's correct cause I've been on my full time job for more Than 5 years and my part time job for 9 months now and never pay that amount of tax who is actually insane. Thanks for you help
GigiBuffon - 12-May-17 @ 8:03 AM
Hey, I grossed £43000 as cis construction worker, will I get tax back when I do my return
Johnfa - 5-May-17 @ 10:26 AM
Keek - Your Question:
Hi I earn about £18200 a year that's £350 a week my question is how much should I save a week to pay my tac bill ??

Our Response:
You can find out more via the gov.uk link here .
MoneyExpertise - 4-May-17 @ 3:00 PM
Hi I earn about£18200 a year that's£350 a week my question is how much should I save a week to pay my tac bill ??
Keek - 4-May-17 @ 12:29 PM
Lou - Your Question:
How much tax should I be paying if I've worked less than 15 hours a week on minimum wageThanks x

Our Response:
You should not be paying any tax if you earn less than £11,500 per annum. If you are, you would need to contact HMRC to have this matter rectified.
MoneyExpertise - 2-May-17 @ 10:35 AM
How much tax should I be paying if I've worked less than 15 hours a week on minimum wage Thanks x
Lou - 1-May-17 @ 9:30 AM
Hi my name is Ayesha I work 24hrs a week andon my monthly wages slip my hours are 96 hrs is this accurate calculations or should I speak with my employer
Aisha - 30-Apr-17 @ 7:56 PM
Postie1066 - Your Question:
Hi, I work as a postman and get £14,500 a year basic wage. I also walk dogs self employed and earn £1200 a year extra income. Would I need to do a self assessment return and have you any idea roughly the amount of extra tax I would need to pay? Cheers.

Our Response:
You would have to register your additional income with HMRC. However, your additional business will have various running costs, meaning you can deduct some of these costs to work out your taxable profit, as long as they're allowable expenses. Therefore, it makes it difficult to predict how much you may have to pay.
MoneyExpertise - 26-Apr-17 @ 2:52 PM
Mom - Your Question:
Hi my daughter is 17 and is a collage student she has a job and get about £5.50 per hour she does as many hours as she can to earn extra money should she be paying tax on her wage.

Our Response:
As specified in the article, she will not pay tax until she earns over the personal annual tax allowance of £11,500.
MoneyExpertise - 26-Apr-17 @ 11:38 AM
Hi, I work as a postman and get £14,500 a year basic wage. I also walk dogs self employed and earn £1200 a year extra income. Would I need to do a self assessment return and have you any idea roughly the amount of extra tax I would need to pay? Cheers.
Postie1066 - 26-Apr-17 @ 7:19 AM
Hi my daughter is 17 and is a collage student she has a job and get about £5.50 per hour she does as many hours as she can to earn extra money should she be paying tax on her wage.
Mom - 25-Apr-17 @ 12:24 PM
I have just started work from 16th Jan it's a 4 months contract. I have received my pay slips for Januarythe tax code was 1100l, but comes february my tax code has changed to 570T. They have deducted a lot of money, I would like to know if that's is right. Please help Thank you
Shak - 2-Mar-17 @ 8:00 PM
I earned £2343 over the 20% threshold in 2015-2016 and the taxman wants me to pay him 40% tax on this amount which is £937.20. Surely I only owe half of this amount as it would already have been taxed at 20%. Help please.
Stan - 1-Mar-17 @ 10:22 AM
If my partner became self-employed 30 January 2017 and his wages go in my bank account what month would I have to show my bank statements from
Lizbizz - 1-Mar-17 @ 1:06 AM
Hey, I have just started an internship for 6 months from Feb-August, and I will be earning £2,000 a month. Therefore, £12,000 for the duration of my internship. Would this mean I pay tax only on £1000? So my monthly income is £2000 until my last month of employment? And do I need to call HMRC to let them know any of this info? Thanks in advance.
Adz - 28-Feb-17 @ 8:00 AM
Dai - Your Question:
Hi I earn 144pounds per week should I get taxed on that?

Our Response:
No, as you are earning under your annual personal tax limit. The standard Personal Allowance is £11,000, please see link here.
MoneyExpertise - 27-Feb-17 @ 2:18 PM
Hi i earn 144pounds per week should i get taxed on that?
Dai - 27-Feb-17 @ 6:29 AM
Jay - Your Question:
Hello there I only earn £100 every two weeks and I still get taxed is this normal

Our Response:
You should not be taxed on this amount if this is your only income. You would have to contact the HMRC and ask to have your tax code changed.
MoneyExpertise - 23-Feb-17 @ 2:50 PM
Hello there I only earn £100 every two weeks and I still get taxed is this normal
Jay - 23-Feb-17 @ 8:56 AM
Jacinta- Your Question:
Hi , does this mean that I will get back the tax I've paid in the first £11,000 ? None of my employers have explained to me how the tax works in this country , I've probably earnt £12,000 at most

Our Response:
If you have paid tax on your annual tax allowance, then you can claim it back if it has been wrongly administered.
MoneyExpertise - 22-Feb-17 @ 11:55 AM
Hi I've started my secand job and havnt been paying tax yet as I havnt reached 1100 wage pay ... my new job income is 250 a week and recive working tax credits plus benifits...how much will it have to pay on taxes and n.i once I am being taxed? Thanks
Marie - 21-Feb-17 @ 10:54 PM
Hi , does this mean that I will get back the tax I've paid in the first £11,000 ? None of my employers have explained to me how the tax works in this country , I've probably earnt £12,000 at most
Jacinta - 21-Feb-17 @ 5:07 PM
Hello i'm going in holidays and i accrued 1,200£ holiday pay how much tax will be deducted as im getting holiday the whole month of march this year. Thanks in advance!
Mac - 19-Feb-17 @ 5:01 AM
Bob - Your Question:
Hi,I currently have a low paid full time job and have been offered £200 a month to do some accountancy work for a sole trader. They will pay on invoice which means being self employed. How does that affect my tax code and what do I need to do to set up a company.ThanksBob

Our Response:
You would have to register for Self Assessment via the gov.uk link here. You have a time limit to do this, which is six months after the end of the tax year in which you first had the income. Once registered, HMRC will send you a notice to complete a tax return for the tax year just ended. This will be classed as 'casual income' and would be filed in the 'other income' section of the form. You would also have to give details of your current employment and income from this. This will allow the HMRC to assess your taxable earnings. If you are on a low income and you do not earn over the personal tax threshold for the year (£11,000)and the casual income still doesn't take you above this, then you will not pay tax. If you do, you will pay tax on your extra income. However, you can also offset some of this casual income through expenses incurred. The videos on the HMRC website will help you here. It is a relatively straightforward process (can be easily completed yourself) if you are organised and keep all your documentation i.e P60s, receipts and bank statements etc.
MoneyExpertise - 16-Feb-17 @ 11:24 AM
Hi, I currently have a low paid full time job and have been offered £200 a month to do some accountancy work for a sole trader.They will pay on invoice which means being self employed.How does that affect my tax code and what do I need to do to set up a company. Thanks Bob
Bob - 15-Feb-17 @ 1:34 PM
if i have a net profit of 10600 self employed how much tax will i need to oay
bazzq - 8-Feb-17 @ 11:51 AM
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