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How Much Tax do I Have to Pay?

By: J.A.J Aaronson - Updated: 11 Dec 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]
performer - Your Question:
I have just completed my first job abroad in Greece (April-October) earning £9,062.12, How much tax will I have to pay roughly, I have paid my NI as that has already come through.I am employed again now by a company and have stopped my self eployment.PLEASE HELP!

Our Response:
If you are self-employed and paying your taxes through UK HMRC, then much depends upon how much you will earn from October - April 2018. The current tax year is from 6 April 2017 to 5 April 2018. Your standard personal tax allowance for this period is £11,500, which is the amount of income you don’t have to pay tax on. Once you earn over this amount, then you will have to pay tax. However, if you are self-employed you will also be able to offset business outgoings and expenses to this amount which can effectively bring your self-employed earnings for the year down. When you complete your accounts for 2017/2018 next year, you will include the income from your current job in your annual figure/earnings. I hope this helps answers your question.
MoneyExpertise - 12-Dec-17 @ 9:35 AM
I have just completed my first job abroad in Greece (April-October) earning £9,062.12, How much tax will I have to pay roughly, I have paid my NI as that has already come through. I am employed again now by a company and have stopped my self eployment. PLEASE HELP!
performer - 11-Dec-17 @ 2:06 PM
Hi I’m paid weekly and been at the same company for 29 years, and I’ve just received a bill for £2300 from the taxman bacically they for got to send a letter to my employer to change my tax code should I appeal against it
Nick - 2-Dec-17 @ 3:36 PM
Hi, I just started a job which pays just over 24,000 PA (before tax). This is my first job and I am already paying tax on my first 2 payslips. I thought I wouldn’t be taxed until I earn over £11500 gross which won’t be for a few payslips yet... should I contact HMRC about this? Thanks!
Tilly - 24-Nov-17 @ 5:55 PM
Jdmagik - Your Question:
I currently work 20hrs a week earn £6313, don't pay tax or Ni. I'm looking to start up my own cake decorating business from home. I know I got to go self employed and pay tax on my profit from my business but is there an amount you can earn like when employed you can earn £11,500 before you pay tax. Is there a limit on self employment before you pay tax or even if you only make £1000 a year you pay tax on that £1000

Our Response:
What you earn from your main job and what you earn through your business would be added together. You still wouldn't pay tax if you earn below £11,500 per annum.
MoneyExpertise - 21-Nov-17 @ 11:50 AM
@TheBoy - you shouldn't be taxed on this. If you are ring HMRC as you will be on emergency tax. You're allowed to earn £11,500 per year before paying any tax.
Saran - 20-Nov-17 @ 3:18 PM
I currently work 20hrs a week earn £6313, don't pay tax or Ni. I'm looking to start up my own cake decorating business from home. I know I got to go self employed and pay tax on my profit from my business but is there an amount you can earn like when employed you can earn £11,500 before you pay tax. Is there a limit on self employment before you pay tax or even if you only make £1000 a year you pay tax on that £1000
Jdmagik - 18-Nov-17 @ 2:22 PM
Hi I have just started a job on £38k a year but have not earned £11k in this financial year, for the first £11k I earn will I be taxed on it? Thanks Steve
TheBoy - 18-Nov-17 @ 1:31 PM
Mazza123 - Your Question:
Hi. I have a full time job but worked two days as an extra for a film. I believe being an extra is classified as self employed. I was paid £267 in total. How much tax & NI will I have to pay. Will working these two days be a disadvantage to my full time job? Many Thanks

Our Response:
Much depends on whether you earn over the £11,500 annual personal tax allowance on your other job. You would have to register for self-assessment to declare this. However, if you incurred any expenses duting this employment such as petrol expenses etc, then you can offset the expenses against this. Otherwise, you would be taxed on this amount at 20%. You would not have to pay additional NI, if you are paying NI as part of your full-time job.
MoneyExpertise - 13-Nov-17 @ 1:52 PM
Hi. I have a full time job but worked two days as an extra for a film. I believe being an extra is classified as self employed. I was paid £267 in total. How much tax & NI will I have to pay. Will working these two days be a disadvantage to my full time job? Many Thanks
Mazza123 - 11-Nov-17 @ 11:23 AM
Ellsbells - Your Question:
I am 17 and have just started my first job that I am being taxed on. I worked in a hairdressers last year and was only earning £600 a month and never got taxed. This job I am earning £1136 a month and am being taxed £230. My tax code is otm1 which means I am being emergency taxed so how do I sort this out and will I get back the extra that I have paid. I given my employer my p45 when I first started and have been working there for 3 months now. So confused.

Our Response:
The main causes of being given the OT tax code are that you have started a new job and you can’t give your new employer your last P45 and didn’t complete a P46 or give your employer other information they need. Another reason is that your tax free personal allowance has been used up. However, you are paying too much tax and should be due a rebate. You would have to contact HMRC directly if you wish to change your tax code, or give your employer the outstanding information needed.
MoneyExpertise - 31-Oct-17 @ 3:51 PM
I am 17 and have just started my first job that I am being taxed on. I worked in a hairdressers last year and was only earning £600 a month and never got taxed. This job I am earning £1136 a month and am being taxed £230. My tax code is otm1 which means I am being emergency taxed so how do I sort this out and will I get back the extra that I have paid. Igiven my employer my p45 when I first started and have been working there for 3 months now. So confused.
Ellsbells - 31-Oct-17 @ 1:04 AM
Match - Your Question:
I have just started work in a job that pays every 2 weeks. I qualify for the 20% tax rate but I am unsure if that only applies to your monthly earnings, so I am confused on what percentage will be taken from my pay every 2 weeks, 20% or 10% so every 2 pay slips total 20% tax over 4 weeks. My pay is £8.19 per hour, at 38.75 hours per week totalling £317.36. This means before tax I’ll be paid £634.73 every 2 weeks. Do HMRC take 20% of that or 10%? Or am I miles off?

Our Response:
Taxable income depends upon the overall amount you earn, not the frequency with which you are paid, please see link here.
MoneyExpertise - 30-Oct-17 @ 11:43 AM
I have just started work in a job that pays every 2 weeks. I qualify for the 20% tax rate but I am unsure if that only applies to your monthly earnings, so I am confused on what percentage will be taken from my pay every 2 weeks, 20% or 10% so every 2 pay slips total 20% tax over 4 weeks. My pay is £8.19 per hour, at 38.75 hours per week totalling £317.36. This means before tax I’ll be paid £634.73 every 2 weeks. Do HMRC take 20% of that or 10%? Or am I miles off?
Match - 28-Oct-17 @ 7:52 PM
Hi, I worked from June to September on a contract for £19,000 a year, however from October I have begun working part time on £11,000 a year. Whilst I was working full time I obviously paid tax and now I'm part time I'm under the tax threshold but I don't know if I should still be taxed or not due to the 4 months working full time, are you able to advise? Thank you!
Lucy - 25-Oct-17 @ 11:15 AM
Hi I was just wondering, I work full time and earn 1260 a month and pay 20% tax and national insurance. But I've just got a part time job 9 hours a week at Tesco 7.50 a hour how much tax will I pay?
Mossy - 24-Oct-17 @ 12:56 PM
Charlie - Your Question:
Hi, I started my second part time job last month. My main part time job is 10 hours a week at £7.50 per hour. My new job is also 10 hours a week £7.50 per hour, term time only so its a spread over wage, so I actually get £6.14 an hour so I get paid in the school holidays aswell, even though not working. My monthly income will now be between £545-£600. Should I be taxed? As I've been taxed on my second job on my first wage slip BR cumulative. Is this an emergency tax or is it correct with that income as I definitely earn under £11000. Many thanks for any advice.

Our Response:
If you’ve been given a BR tax code, it means all of your salary is taxed at 20% and your tax free personal allowance has not been taken into consideration The BR (Basic Rate) tax code is a temporary code, used until your employer has all of the necessary details to issue you with the correct code, so your tax can be applied correctly. You should get any tax you have paid returned to you if you contact HMRC directly.
MoneyExpertise - 23-Oct-17 @ 11:18 AM
Hi, I started my second part time job last month. My main part time job is 10 hours a week at £7.50 per hour. My new job is also 10 hours a week £7.50 per hour, term time only so its a spread over wage, so I actually get £6.14 an hour so I get paid in the school holidays aswell, even though not working. My monthly income will now be between £545-£600. Should I be taxed? As I've been taxed on my second job on my first wage slip BR cumulative. Is this an emergency tax or is it correct with that income as I definitely earn under £11000. Many thanks for any advice.
Charlie - 22-Oct-17 @ 2:20 PM
Buddy- Your Question:
Hi I would like to know if you are able to tax someone who is on £6.00 an hour and who earns less than £11.500 per year

Our Response:
If you earn or have earned less than £11,500 this year, you should not be taxed. Unless you are paying emergency tax, in which case you may wish to speak directly to HMRC who will sort out your tax code.
MoneyExpertise - 17-Oct-17 @ 4:20 PM
Hi I would like to know if you are able to tax someone who is on £6.00 an hour and who earns less than £11.500 per year
Buddy - 17-Oct-17 @ 3:42 PM
CharlieDee - Your Question:
Hi there,I started working in a job and was first paid this July, my monthly salary was £1500 before tax and is now £1666 from October, I paid this month 142 tax and 120.20 NI and similar the previous months, im wondering will I be due a rebate in April as I will have only earned approx £16,162 for the year running up until April 18. I am not sure ho it will work and how much ill owe or be refunded? Help!

Our Response:
If you are earning £1500 per month, then you should be paying approximately £108 in tax. On £1666, you should be paying approximately £141 based on over 12 months per year. However, this is a very loose assumption. If you wish to know whether you are paying the correct tax you can look at your tax code, please see link here and/or ring HMRC directly to see whether you may be owed a rebate.
MoneyExpertise - 10-Oct-17 @ 10:49 AM
Hi there, I started working in a job and was first paid this July, my monthly salary was £1500 before tax and is now £1666 from October, i paid this month 142 tax and 120.20 NI and similar the previous months, im wondering will i be due a rebate in April as I will have only earned approx £16,162 for the year running up until April 18. I am not sure ho it will work and how much ill owe or be refunded? Help!
CharlieDee - 9-Oct-17 @ 11:41 AM
Chowski - Your Question:
Hi I'm going into a self employed job I will earn under the £11.500 threshold but will have to pay my own tax, do I need to pay my tax then reclaim it or will Hmrc see that I have not earned enough to pay it? Also getting told conflicting statements that I will pay tax through my Utr number please help I'm confused

Our Response:
You will still have to register for self-assessment if you are earning money, regardless whether you are earning under the £11,500 annual personal tax allowance threshold. This will allow HMRC to keep track of your earnings. Your tax will be assessed automatically if you fill your form in online. If you have earned under £11,500 then your tax will be calculated at nil at the end of the process. You can see more via the gov.uk link here . If you are starting a job soon, you will not have to submit your first finalised tax return until the deadline of Jan 2019 (or any time after April 5, 2018) . However, you would need to log all income and expenditure relating to your business or employment from when you start your job.
MoneyExpertise - 5-Oct-17 @ 10:24 AM
Hi I'm going into a self employed job I will earn under the £11.500 threshold but will have to pay my own tax, do I need to pay my tax then reclaim it or will Hmrc see that I have not earned enough to pay it? Also getting told conflicting statements that I will pay tax through my Utr number please help I'm confused
Chowski - 4-Oct-17 @ 1:26 AM
Hi there. I started a new job two weeks ago, and just got paid for that two weeks.my take home pay was £690, got £1.48 national insurance, not tax. Will my full month salary next month be just double 690, or will I have tax and more national insurance out too, and how much? My annual salary is 18000
Jonnyt - 30-Sep-17 @ 9:46 AM
Hello I take home £1843.98 pm from a private pension after tax. I am taking a part time job with a choice of payeor self employed.Will I pay tax or can I earn so much before I pay tax and NI onpaye ? Thanks Regards Kimmi
Kimmi3dog - 30-Sep-17 @ 8:30 AM
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
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