Home > Finance in the UK > How Much Tax do I Have to Pay?

How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 9 Aug 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.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
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
Troy - Your Question:
I’m 17 and will be working 40 hours a week £270 per week how much tax would I pay

Our Response:
Based on a salary of £14,040 per annum, you would pay approximately £8 per week in tax for 2018/2019.
MoneyExpertise - 19-Jul-18 @ 11:30 AM
I’m 17 and will be working 40 hours a week £270 per weekhow much tax would I pay
Troy - 17-Jul-18 @ 11:20 PM
Festus19 - Your Question:
Hello Iam an international student who is employed earning 700 per month how much tax should I be paying ? This month 144 was deducted from my pay

Our Response:
You can check your tax code here against your payslip. You should not be paying this amount in tax if this is your sole taxable income. You may wish to speak to your employer directly, or contact HMRC.
MoneyExpertise - 10-Jul-18 @ 10:53 AM
Hello Iam an international student who is employed earning 700 per month how much tax should I be paying ? This month 144 was deducted from my pay
Festus19 - 9-Jul-18 @ 3:03 AM
Hi, I've just been offered a job, 18hours a week @ 8.40 an hour, I am 63 taken early retirement and have a private yearly pension of 9k. Will it be worthwhile me accepting the job? As I am worried about the tax implications. I am married my husband is in full time employment. Kind regards.
No - 3-Jul-18 @ 8:22 AM
Hello, I got pay 176/w but after tax deductions I got 139. I think I may overtax. For a week I got £34 reduce. Should I complain to me employer or HRMC?
Paulina - 30-Jun-18 @ 2:10 AM
Anna - Your Question:
Hey, my partner seems to be getting over taxed, but I am not sure. He earns on average a grand a month but then hets taxed 200+ surely that is not right?

Our Response:
If your partner's gross wage for the year is £12,000, then he would pay £2 per month in tax. Your partner is paying to much tax if he is paying £200. He should get this back if he contacts HMRC directly.
MoneyExpertise - 28-Jun-18 @ 11:38 AM
Hello, I was deducted 22% combined IT and NI but previous months I have been deducted 18-19%, should this percentage vary as much month to month even if you are on the same tax code? Thank you
johnboy - 28-Jun-18 @ 9:34 AM
Hey, my partner seems to be getting over taxed, but I am not sure. He earns on average a grand a month but then hets taxed 200+ surely that is not right?
Anna - 27-Jun-18 @ 7:43 AM
Georgia - Your Question:
I don’t normally get taxed as I earn around 800 a month however this month I have done overtime and should be getting just roughly over 1000 will I be taxed on this months pay and if so how do I get it back? Thanks

Our Response:
You will only be taxed if you are likely to earn more than £11,850 per annum.
MoneyExpertise - 21-Jun-18 @ 9:31 AM
I don’t normally get taxed as I earn around 800 a month however this month I have done overtime and should be getting just roughly over 1000 will I be taxed on this months pay and if so how do I get it back? Thanks
Georgia - 20-Jun-18 @ 3:00 PM
I have recently retired and I have just received my first month of a nhs pension which should be £440 per month and I am not receiving any other pensions as not old enough to qualify for state pension yet. I have been taxed £89.20 on my first month surely that is wrong as I thought I wouldn't pay any tax on a pension that small
Annie - 27-May-18 @ 5:14 AM
Hatrick - Your Question:
I started working full time permanent for a mail company last year, November. In the month of April I did some overtime, I was supposed to get this month around 2200£ after taxes being taken but I only got 1800£, when I check my pay slip I saw that it was taken from me around 450£ for taxes, is this normal??

Our Response:
You have paid too much tax. You may wish to speak to your employer and/or HMRC regarding this matter. You will be able to claim this back.
MoneyExpertise - 24-May-18 @ 3:04 PM
I started working full time permanent for a mail company last year, November. In the month of April I did some overtime, I was supposed to get this month around 2200£ after taxes being taken but I only got 1800£, when I check my pay slip I saw that it was taken from me around 450£ for taxes, is this normal??
Hatrick - 23-May-18 @ 10:05 PM
Hem68 - Your Question:
Im reducing my hoursnext month I will be losing nearly 2000 a year If my earnings drop to 11 480 will I stop paying tax

Our Response:
Yes, you will stop paying tax. Your annual personal tax allowance for 2018/19 is £11,850. Once you earn over this amount, you will only be taxed on any income you earn above this figure.
MoneyExpertise - 21-May-18 @ 12:28 PM
Im reducing my hoursnext month i will be losing nearly 2000 a yearIf my earnings drop to 11 480 will i stop paying tax
Hem68 - 19-May-18 @ 10:18 AM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    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?
    10 August 2018
  • GR4HM
    Re: How Much Tax do I Have to Pay?
    ive just started a new job as a labourer so im employed and earn 200 a week will i have to pay tax?
    9 August 2018
  • Ivy
    Re: How Much Tax do I Have to Pay?
    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…
    3 August 2018
  • MoneyExpertise
    Re: How Much Tax do I Have to Pay?
    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…
    2 August 2018
  • Billy 123
    Re: What is SERPS and What Was 'Contracting Out' ?
    Reply for Joey's mum. I'm no expert and best check with citizens advice but I think you could use you pot…
    1 August 2018
  • Lisa
    Re: How Much Tax do I Have to Pay?
    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…
    31 July 2018
  • MoneyExpertise
    Re: Taxation for the Self-Employed
    jordo - Your Question:I am a full time student. I have been offered some holiday work with a construction company. I know that I…
    31 July 2018
  • MoneyExpertise
    Re: A Guide to Unemployment Benefits
    rkrgrg - Your Question:I have been unemployed for 2 months. I have started receiving JSA and local council has also made…
    31 July 2018
  • jordo
    Re: Taxation for the Self-Employed
    I am a full time student. I have been offered some holiday work with a construction company. I know that I would be under the…
    31 July 2018
  • rkrgrg
    Re: A Guide to Unemployment Benefits
    I have been unemployed for 2 months. I have started receiving JSA and local council has also made adjustment on my Council…
    31 July 2018
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the MoneyExpertise website. Please read our Disclaimer.