Fast, effortless and 100% online.
There are two main components that are taken off your gross pay –
income tax and national insurance contributions made by your employer.
In your case when you earn £49,000 yearly:
You pay no income tax on first £12,570 that you make
You pay £7,286 at basic income tax rate (20%) on the next £36,430
No contributions on the first £9,568 that you make
You pay £4,732 in contributions (at 12%) on the next £39,432 that you make
On top of these, your employer will also pay £5,442 of additional NI contributions, but these don’t come out of your salary. Your employer has to cover them.
When you earn money over a certain threshold, you have to pay Income Tax and National Insurance. If you’re employed and you get paid a salary every month, you’re taxed by a system called Pay As You Earn (PAYE). This means that Income Tax and National Insurance are deducted automatically from your salary by your employer before it hits your bank account. When you’re self-employed, the system works a little differently. You have to file a tax return to declare your earnings and then you National Insurance and Income Tax manually on the day of the tax return deadline. When you pay online, this deadline is 31st January.
When you earn money from both employment and other sources (e.g. you rent out a room in the house you own or have a side business), you’ll owe tax on the total amount.
If you’re PAYE, there will be more deducted from your salary than just National Insurance and Income Tax. You may have a workplace pension, your student loan repayments or any other workplace benefits being deducted from your monthly pay. What our calculator shows you is how much tax is deducted based on what you earn.
Is water wet? There are of course more taxes to pay than just National Insurance and Income Tax. But the taxes you may owe depend on the source of your untaxed income. Here are some examples:
It’s really easy. Just put in your annual salary/earnings, choose whether you want to see your monthly or yearly salary after tax, then choose the tax year in question. This is important because some years, the tax rates are updated in the budget.
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