Tax free Allowances 6,035.00

khukon

just got into my first job after uni ( dec ) and im a little confused about the Tax free Allowance of £6,035.00

my question is this , if i earn £18000 per year and get taxed at 21%. does this mean ( taking the Tax free Allowance into account ) i only get taxed on
£11965 ( 18000 - 6035 )



thank you for any responses in advance.

danny69

correct! if you havnt earned anything so far this year then until april you wont be taxed at all, just pay national insurance.

Pont

Yep £18000 - 6035 = 11965 (income tax @20% = 2393)

CLAPTON

essentially yes, you will only be taxed on 11,965 but at 20% (not 21%)
you will also pay NI which depends but is 11% on sums above 453 per month

note however, that as you have only just started work and the tax year ends april 5th 2009 then your 6035 is applied to your earning Dec through March so you should pay no tax for this tax year.

you need to be on a tax code of 603L (without anything like M1 or Wk1 after it).

Pont

Yep £18000 - 6035 = 11965
= 11965 (income tax @20% = 2393)
= 11965 (NI @ 11% = 1316)

Total deductions = 3709
Student loan repayment (if applicable) = 180

Therefore 18000 - 3709 - 180 = £14111 (£271 per week)

khukon

CLAPTON wrote: »

essentially yes, you will only be taxed on 11,965 but at 20% (not 21%)
you will also pay NI which depends but is 11% on sums above 453 per month

note however, that as you have only just started work and the tax year ends april 5th 2009 then your 6035 is applied to your earning Dec through March so you should pay no tax for this tax year.

you need to be on a tax code of 603L (without anything like M1 or Wk1 after it).

im currently tax code 603L w but im sure that will change by my next pay slip. thank you all for your quick response. much appreciated:T

CLAPTON

Pont wrote: »

Yep £18000 - 6035 = 11965
= 11965 (income tax @20% = 2393)
= 11965 (NI @ 11% = 1316)

Total deductions = 3709
Student loan repayment (if applicable) = 180

Therefore 18000 - 3709 - 180 = £14111 (£271 per week)

NI is 11% of anything above 453 per month i.e. 1,382

student loan is 9% of the excess over 15,000 i.e. 9% of 18,000-15000 = 9%of 3000 = 270

Pont

My mistake Clapton - you're absolutely right - Student Loan repayments are 9% over £15000 and not the 6% I suggested.
I don't know why I put 6% down as I know full well it's 9% (I've been paying mine off for years!). Late night last night is my only excuse - apologies.

skyjumper

CLAPTON,

can yu please direct where you got the following figures- not that I disagree with you , but would like to see a link or table or something to confirm that

NI is 11% of anything above 453 per month i.e. 1,382

thanks

Tiggergirl

skyjumper wrote: »

CLAPTON,

can yu please direct where you got the following figures- not that I disagree with you , but would like to see a link or table or something to confirm that

NI is 11% of anything above 453 per month i.e. 1,382

thanks

NI rates and thresholds can be found here.

The employees primary threshold is £105 per week, so roughly 453 per month.

skyjumper

thanks Tiger girl for the link,

Could you please confirm that- if I were to get £450 per month since April 2008, I wouldn't have to pay any NI or Tax on my take home salary of £ 5400 p.a

thanks again

P.S khukon,I'm not trying to hijack your post, just thought it would be more appropriate to ask here than start a new thread on this