How much tax will i pay

How Is Tax Calculated?

Unless you are earning over £125,140 then your tax is calculated by simply taking your Personal Allowance amount away from your income.

Once your Personal Allowance has been taken away, the remaining amount will be taxed and your Personal Allowance will be left tax free. However, if you earn over £125,140 then you are not granted Personal Allowance.

For example, if you are earning an annual income of £30,000 and you have a Personal Allowance of £12,570 per year, then £30,000 minus the £12,570 is a total of £17,430.

The £17,430 is the only money that will be taxed, and will be taken as a percentage. National Insurance Contributions will be taken from your overall income though, unless you have already reached the state pension age. Any National Insurance costs are taken as a percentage, provided that your salary is above £242 each week, or £12,570 per year.

Income Tax Bands & Rates