Wage taxes are taxes that we pay from our income, although it’s not a formal term in the tax world.
In the UK, the wage taxes that we pay are Income Tax and National Insurance.
Income Tax is based on what we earn yearly. You have to pay it whether you’re employed or self-employed. The rate that you pay is based on the below table:
|Up to £12,500||0%||Personal allowance|
|£12,501 to £50,000||20%||Basic rate|
|£50,000 to £150,000||40%||Higher rate|
|over £150,000||45%||Additional rate|
Take a look at the HMRC website if you want to learn more about income tax rates.
What kind of wage taxes are National Insurance payments?
There are six types of National Insurance payment:
Classes 1, 1A, 1B, 2,3 and 4 National Insurance. By paying them, we get access to state-provided benefits like the Job Seeker’s Allowance, the Marriage Allowance, the state pension and more.
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