How much can you earn before...

gdcox

Brilliant idea Martin to have this list.

Suggest you have it in two columns.
One will relate to individuals and one to family.

A minor addition is the 10% band for tax interest

Suggested title to table is 'A Brown Mess'

paul_hills

Sisyphean_Task wrote: »

£44,888... the amount you pay 11% NI up to (1% beyond that)

What?

If you earn £44,889 you drop 10% from 11% to 1% or should it be 12% beyond that?

I think you will find it is actually £43,888 NOT £44,888.

gdcox

Sisphean,

When you look at the marginal tax/benefit rate graphed against income , you will in graphical form see the madness of government in action( you were reacting to one of those kinks inn the graph); but since such things are too obscure for election campaigns we can expect such mismanagement of the impact of tax on work decisions to continue.
There is no consistent logic for the NI by the way in my view as an economist: eg that it is a premium for certain benefits. Many government payouts are event/risk related (eg hospital treatment or housing benefits) but they are not paid for by regressive tax structure like NI.

Former_MSE_Wendy

You're right Paul, I've corrected this in the original post. Thanks for the spot

johnkerry

I think it is between 100k and 120k that your personal allowances start being taken away - which means people earning between these levels (or whatever the levels are) face a marginal tax rate of 60%!!!!!! So they are actually paying a higher marginal tax than people earning over £150k. Utterly bonkers.

ponyboy2000

johnkerry wrote: »

I think it is between 100k and 120k that your personal allowances start being taken away - which means people earning between these levels (or whatever the levels are) face a marginal tax rate of 60%!!!!!! So they are actually paying a higher marginal tax than people earning over £150k. Utterly bonkers.

Can you explain what this means please? What personal allowances are taken away?

I'm not on that much cash but I am still interested to know.

Also, I thought you paid 40pct tax on anything over £33,000 (roughly)

geri1965_2

rmanpaul wrote: »

I just can't wait to be average just like a lot of people

Me too - everytime I get a pay rise, the average goes up and I can never seem to quite get there!

shadowmaster

The personal allowance, below which income is not taxable, will be £6,475 for 2009/10.
For the highest earners, the new rules mean that once your income goes over £100,000 in 2010, the Government will begin clawing back the personal allowance at a rate of £0.50 for every £1 of income over £100,000, until half of the personal allowance has gone.
The £1 of income above £100,000 not only costs a worker £0.40, it also results in the loss of £0.50 of personal allowance, which means that an extra £0.50 of income becomes liable to tax, at 40%, which is another £0.20 in tax.
If you earn more than £100,000, this means that you have to pay an effective rate of tax of 60% on your income above £100,000 until half your personal allowance has gone (when your income has gone up to £106,475).

Also be warned:



Both the lower and upper rates of National Insurance will be hiked 0.5% from April 2011. However, the starting point for NI contributions will be brought into line with that of income tax. From April 2011, the lower level of NI will be 11.5%, the higher level will be 1.5%.

Mr_MTM

Could someone add the median income. The Average, or mean income (i.e. everyone's income added together and divided by the number of people), is heavily influenced by a small number of high earners.

To get a clearer picture of what the typical man or woman in the street earns you need the median, or most common, salary. No idea what this is but it will be several thousand pounds lower than the 'average.

Mark

hershman

Is there age/amount when you stop paying NI contributions? If you are past retirement age and still working - I am self employed aged 61 and female - and will not be taking the state pension for years.