Government Debt Interest Repayments

Generali

So how would it work for a graduate on £50,000? DAK?

CLAPTON

I was talking about MARGINAL rates for my successful young graduate and comparing them with MARGINAL rates for people earning over 150,000


MARGINAL rate of tax at 50K is 40% (well it starts at 43,875)
MARGINAL rate of NI is 1% (11% falls to 1% after 43,875)
MARGINAL rate of student loan deduction is 9% (after 15,000)

Generali

CLAPTON wrote: »

I was talking about MARGINAL rates for my successful young graduate and comparing them with MARGINAL rates for people earning over 15,000


MARGINAL rate of tax at 50K is 40% (well it starts at 43,875)
MARGINAL rate of NI is 1% (11% falls to 1% after 43,875)
MARGINAL rate of student loan deduction is 9% (after 15,000)

Thanks for the clarification CLAPTON.

CLAPTON

Generali wrote: »

So how would it work for a graduate on £50,000? DAK?

It works like this

income 50,000
tax free = 6475
so actually taxed is 43,525
the first 37,400 is taxed at 20% i.e. 7,480 in tax
the remainder 6125 taxed at 40% i.e. 2,450
sub - total tax is therefore 9,930

NI
first 5720 is NI free
then the next 38,155 is at 11% = 4,197
over 43,525 is at 1% = £61
sub -total NI is 4,258

student loan ..everything over 15,000 at 9%

so 35,000 at 9% = 3,150

total deductions are 17,338

so AVERAGE deduction is 34.68%
MARGINAL deductions are however 49%


of course if you contribution to an occupational pension fund or are otherwise opted out of the second state pension scheme the 11% falls to 9.4%