How much income tax do I pay?

The amount of income tax you pay depends on how much income you have. Basically the more you earn the more income tax you will have to pay.

Most UK tax payers are employed and pay tax under the system called PAYE. The amount of income tax you will pay is decided by which income tax bracket your salary falls into.

Remember, your ‘taxable income’ is your income minus your Personal Allowance amount. So take away your Personal Allowance from your salary before you decide which tax bracket you are in.

The income tax brackets for this current tax year are:

How much is tax 2023/2024 tax year (England, Wales & Northern Ireland)
Income Tax Basic rate: 20% £12,571 to £50,270
Income Tax Higher rate: 40% £50,271 to £125,140
Income Tax Additional rate: 45% Over £125,140
How much is tax 2023/2024 tax year (scotland)
Income Tax Starter rate: 19% £12,571 to £14,732
Income Tax Basic rate: 20% £14,733 to £25,688
Income Tax Intermediate rate: 21% £25,689 to £43,662
Income Tax Higher rate: 41% £43,663 to £125,140
Income Tax Additional rate: 46% Over £125,140

How much is tax? What else you need to know:

  • The most common income tax bracket is basic rate, which means you will pay 20% tax on your taxable earnings.
  • You need to take off any tax free personal allowance from your total income to give you the figure at which the 20% of tax will be taken from.
  • If you start earning over a certain amount you will pay tax at 20% on some of your income, and then 40% or 45% on the rest.
  • Your tax code is a key part of paying the right amount of income tax. If your tax code is wrong you will pay too much or too little tax.

Tip: It’s important to know that any work expenses tax rebate is paid at the highest rate of tax you pay.

Don’t forget national insurance

If you are trying to work out how much will be deducted from your salary it’s always worth remembering national insurance.

Although nothing to do with income tax, national insurance deductions are taken off your salary in the same way. The current national insurance deduction figures are:

2% on your weekly earnings between £149 and £797 2% on any weekly earnings over £797

Tax Rebates

When working out how much tax you need to pay it’s always worth checking to see if you have overpaid tax in the last four years. The reasons for overpaying tax vary from person to person and are often missed.

Tax free personal allowances

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