Tax question (boring I know)

Rich1988

Rich1988

Rich1988

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wiltshire
Hiya, I had a little look because im sure it has been asked before but basically a question about what I am going to be taxed, my tax code is 522l which I understand means I am allowed 5220 pounds without tax a year (except N.I, what is the rate N.I is charged at btw?) but after the 5220 pounds I am wondering what the tax is charged at, will be earning under 20k as its a training position, Thanks!!
 
Off the top of my head it's 11% for the next £2020 then 22% for anything else up to about £34K and 33% for anything earned over that. Plus National Insurance on top at about 10%. Don't let that old chestnut catch you out ;)
 
Jonny69 said:
Off the top of my head it's 11% for the next £2020 then 22% for anything else up to about £34K and 33% for anything earned over that. Plus National Insurance on top at about 10%. Don't let that old chestnut catch you out ;)
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i worked out from my wage slips that 22.5% of my wage goes each month to pay tax and NI.

im on the same tax code 552L
 
my trainee wage will be 14k a year (goes up to 18 after 6 months but im going to work on 14k) my gross is 269 a week and i take home 219.60 around 11.5 a year apparently 2,632.00 in tax 938 of which is N.I
 
Remember you need to do all these calculations based on the 2008/9 tax year - the 10% band disappears and basic rate comes down to 20%
 
oh does that mean ill be paying less then? (not very good with maths) it comes down from 22 to 20 but what does the 10% band dissapears mean?
 
There is a point at which you pay less overall but I'm not 100% sure where that point is. The loss of the 10% band means you'll be paying 20% on everything over your allowance.
 
Just to guide you through how tax works, since no one else has, you don't pay a fixed amount of tax for your whole salary.

You get £5220 personal allowance (tax free), as you have rightly stated, then pay 10% of the next £2,230, then 22% after that upto £34,600, and anything after that (if you should be so lucky), is a whopping 40%.

Just google Tax bands, it's pretty simple and easy to work out.

In your instance, earning £20k, you can break it down:

20000
-5435
14565 - taxable
2230 @ 10% = 223
12335 @ 22% = 2713.70

Total tax: £2,936.70
Total Earnings after tax: £17,063.30
 
Cyberstrike2027 said:
Just to guide you through how tax works, since no one else has, you don't pay a fixed amount of tax for your whole salary.

You get £5220 personal allowance (tax free), as you have rightly stated, then pay 10% of the next £2,230, then 22% after that upto £34,600, and anything after that (if you should be so lucky), is a whopping 40%.

Just google Tax bands, it's pretty simple and easy to work out.

In your instance, earning £20k, you can break it down:

20000
-5435
14565 - taxable
2230 @ 10% = 223
12335 @ 22% = 2713.70

Total tax: £2,936.70
Total Earnings after tax: £17,063.30
Click to expand...


I thought RP said that in this new financial year they are removing the 10% band?
 
Rich1988 said:
I thought RP said that in this new financial year they are removing the 10% band?
Click to expand...

Indeed, with personal allowance increasing inline with inflation to 5435 & basic rate all the way to about £40k being 20%. I should be paying less tax, which is lovely :D
 
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