income tax and national insurance
In the United Kingdom, you are required to pay income tax and National Insurance contributions on your earnings. These are deducted from your pay by your employer and should be clearly defined on your payslip.
Tax
You will receive a personal tax free allowance of £12,500 on your earnings. Income above this amount is then taxed according to a series of bands:
- Income between £12,501 and £50,000 is taxed at the basic rate of 30%.
- Income between £50,001 and £150,000 is taxed at the higher rate of 40%.
- Income of £150,001 and above is taxed at the additional rate of 45%.
When you earn above a certain amount, your personal tax free allowance begins to reduce. For every £2 you earn over £100,000, your personal allowance will be lowered by £1 until it reaches £0.
National Insurance
When you arrive in the UK to begin your new role, you will need to apply for a National Insurance number. This is a combination of characters and numbers unique to you, which ensures that your tax and National Insurance contributions are correctly recorded against your name.
Provided you can demonstrate your right to work in the UK, you may begin your role while awaiting your number, but you should tell your employer that your application is in progress.
In standard employment, you will typically pay National Insurance at a rate of 12% on earnings between £155 and £815 per week (£672 to £3,532 per month). On earnings above this amount, you will pay National Insurance at a rate of 2%.
Apply for a National Insurance number
Calculate your take-home salary after income tax and National Insurance
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