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How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 21 Feb 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 £155 - £827 per week, you will pay 12% of your income in National Insurance Contributions, or NICs. Furthermore, if you earn over £827 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 £2.80 per week. On top of this, you will be required to make Class 4 contributions of 9% of your income between £8,060 and £43,000. 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 £5,885, 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 £11,000 (6 April 2016 to 5 April 2017). If you are employed, then you will pay tax on earnings over this allowance as follows: 20% up to £31,785, 40% between £31,786 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 2016-17 tax year.

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[Add a Comment]
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
I am self employed and in total earned £12400 after allowable expenses.Am I right that I just pay Class 2 NI contributions as my total profit after my personal allowance is only £2400?
Shells - 2-Feb-17 @ 7:21 PM
Hi, my daughter has recently got her first job in a racing yard. It is paid monthly, first month just completed. Tax and NI seems to be the right amounts gone from her pay packet, £1300 earned, £100 tax, £80 NI,but at the end of the year, she actually would only have earned about £14,000, so assuming there might be a tax rebate .Would this be automatic, or do we have to request it ?thanks
noo - 2-Feb-17 @ 12:31 PM
Hi I work 16 hours a week self employed 15 hours rate of £7.20 per hour and 1hour £16 How much tax will I have to pay to HMRC?
Aly - 30-Jan-17 @ 7:33 PM
I'm self employed if I pay a round figure of 5 grand and send this off to my account would I get the 5 grand back minus national insurance and the accountants cut?
Reggie - 25-Jan-17 @ 5:51 PM
Sbo - Your Question:
I'm confused about my tax and I don't know how to work it out can someone help please I feel like I've been tax too much if I got paid 2thousand and seven hundred how much would I be tax or 2thousand how much would they tax me please???????

Our Response:
It has to be worked out over the year and take into account your annual personal tax allowance. Therefore, it is impossible to calculate from a random amount. If you are employed you would have to supply your annual, monthly, or weekly earnings in order for us to be able to help assess how much tax you would pay across the year.
MoneyExpertise - 25-Jan-17 @ 1:44 PM
I'm confused about my tax and I don't know how to work it out can someone help please I feel like I've been tax too much if I got paid 2thousand and seven hundred how much would I be tax or 2thousand how much would they tax me please???????
Sbo - 25-Jan-17 @ 12:21 AM
I took home 440 and was on 20% tax so what was my gross pay.
Moon - 23-Jan-17 @ 8:42 PM
Earn 35k 10k went on expensive £25000.00 net Self employed How much tax should I be paying?
Lew123 - 23-Jan-17 @ 5:13 PM
I have worked 165 hours in the December. My hourly wage is 9,74. I earned £1609 monthly but paid £ 400 tax. Is that right ?
Colo - 20-Jan-17 @ 5:51 PM
Adz - Your Question:
Hi, I will be earning about £1400 per week so that would be £5600 per month, how much would I be taxed per month?

Our Response:
With a gross annual wage of £67,200, you will take home £3,870 per month and will pay £1,340 tax per month and £390 National Insurance.
MoneyExpertise - 20-Jan-17 @ 11:22 AM
Hi, i will be earning about £1400 per week so that would be £5600 per month, how much would i be taxed per month?
Adz - 19-Jan-17 @ 12:52 PM
Hi. If i got payment up to £200 a week. How much i have to pay tax?
Emily - 18-Jan-17 @ 11:21 AM
Bani78 - Your Question:
I just started working employed.i get paid £130 p/d.how much % tax I pay from my wages??

Our Response:
I am assuming you are being paid £130 per day over 5 days per week, over 52 weeks per year, which means you would be on a salary of £33,800 (£2,817) per month. If so, you would pay £380 tax to the HMRC per month (annually £4,560). I hope this helps answer your question.
MoneyExpertise - 17-Jan-17 @ 10:54 AM
I just started working employed.i get paid £130 p/d.how much % tax I pay from my wages??
Bani78 - 16-Jan-17 @ 9:08 AM
Hi I left my fill time employment on the 5th January.I'm paid monthly at 1600 per month. I am due 4 working days (37.5 hours a week) plus 19 hours accrued holiday pay. When I receive my final pay at the end of January, will I be taxed on this amount? It works out at £480 gross for that calendar month.I've been with the company 6 years on tax code 1106. Thanks Thanks
Jad - 15-Jan-17 @ 3:23 PM
Hodgson1989 - Your Question:
I get paid £22.000 a year and I've already paid £2140 in income tax! Is this right.?

Our Response:
You don't say how long you have been in your employment i.e when you started paying tax this year. As a rule, across the whole year (April 2016 -April 1, 2017) you would be eligible to pay £2,200. Much depends upon how much tax left you will pay until April 1, as to whether you will have paid over the limit (given that you have been paying since April, 2016).
MoneyExpertise - 9-Jan-17 @ 2:56 PM
I get paid £22.000 a year and I've already paid £2140 in income tax! Is this right.?
Hodgson1989 - 9-Jan-17 @ 12:55 PM
Dan - Your Question:
If I earn £13000, should I be paying tax on the whole £13000?

Our Response:
You will pay tax on £2,000 - as £11,000 is your annual personal tax allowance of which you wont pay tax on.
MoneyExpertise - 5-Jan-17 @ 12:41 PM
If I earn £13000, should I be paying tax on the whole £13000?
Dan - 4-Jan-17 @ 8:19 PM
Hi I was only self employed for 1 month I earnt £400 and had a out £140 in expensess. I was working full time before this andeal full time after this (neither self employed) I am about to do my tax return will i owe money?
Loza - 29-Dec-16 @ 6:18 PM
I have to pay back £400 i earn £1200 a month and have to pay 20% on top how much tax will i roughly be paying till its payed off please
Ron - 27-Dec-16 @ 3:09 PM
I've earned £7600 from April and have paid full tax and am now out of work until the foreseeable have I paid too much? Am I due a rebate?
Beechie - 26-Dec-16 @ 8:41 PM
Rayray - Your Question:
Ive been in my current job for 4 years and earn 18,200 a year before tax and am on tax code 1106L how much tax and national insurance should I be paying?

Our Response:
If you earn £18,200 over the year(2016/17) you'll pay in total £1,440 income tax (£120 tax per month).
MoneyExpertise - 21-Dec-16 @ 2:17 PM
Ive been in my current job for 4 years and earn 18,200 a year before tax and am on tax code 1106L how much tax and national insurance should I be paying?
Rayray - 21-Dec-16 @ 2:07 PM
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