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UK Income Tax Rules

The I-resign.com salary calculator is based upon the rules that apply for April 2010-2011, set out below, and we also outline some of the changes that will come in next year. You can find all the figures on the HM Revenue and Customs web site). The calculator assumes that you are a regular employee, and not a company director or self-employed and is only valid for the United Kingdom.

Your head will pound if you read all this, and that's why we created the calculator for you!


National Insurance Contributions

National Insurance contributions for employees are calculated on your pay per week. The bands are shown below.

Pay Per Week National Insurance Rate
First £102 NIL
Salary over £102 and under £817 12%
Salary over £817 2%

Allowance

ALLOWANCE AMOUNT
Personal
- Basic £7475
- Age 65-75 £9940
- Age 75 and over £10090
Blind Personal £1980
Married Couple's
This allowance has been abolished unless one of the couple is 75 or over.
- Age 75 and over £2800 - £7295

Your Allowance is the amount of money you are allowed to earn without paying income tax.

Your Personal Allowance depends on your age. For example, if you are under 65 and earn £28,400 per annum your allowance is £7475. This means you have to pay income tax on £20925. If you are also blind, you will only pay income tax on £18945.

The elevated allowances for the over-65's are reduced by £1 for every £2 you earn above a limit of 24000, but will never go below the basic allowance of £7475.

From this tax year your personal allowance will be reduced if you earn more than £100,000. For every £2 over this limit your allowance will be reduced by £1. Back at ya, bankers!

If you are married, and either you or your partner are 75 or over you will receive a Married Couple's Allowance. 10% of the allowance is given back to the couple after tax has been paid. The figure of 7295 is the maximum allowance which drops by £1 for every £2 you earn above a limit of 24000, but will never go below the minumum allowance of £2800.

Are you getting all this?


Income Tax Rates

TAX RATE INCOME RANGE AFFECTED
10% This rate is no longer used as of April 2008
20% £0-£35000
40% £35001-£150000
50% £150001 and above

There are three bands of income tax. Your taxable income is the amount you earn minus your personal allowance (see above).


Student Loans

If you have a student loan and earn more than £15000 per year, you'll be paying yet another tax. The repayments are based on a great big table which you can punish yourself by reading on the HMRC web site. We've estimated your repayment in the calculator.