Why is take home pay in the UK, so much less than other Western Countries?

drc

I just did a calculation for a PAYE salary of £50k (a just above average wage). The calculation is as follows;

Tax: £9884
NI: £4,337
Take home pay: £35,778.

In contrast, a salary of 50 euros in Germany gives you;

Tax: euros 8,212
NI equivalent: euros 266
Take home pay: euros 41,521

and the States

Tax: $2,565
NI equivalent: $2,825
Take home pay: $44,610.

Why is tax/NI in the UK so much more? Where is it all going?

ILW

Think if you compare to France or some of the Scandinavian countries it would be different.

somethingcorporate

£50k is twice the average wage in the UK so to call it "just above average" is completely wrong.

Plus, you cannot compare 50,000 apples to 50,000 oranges. One pound does not equal one euro or dollar, so do the appropriate conversion and then apply the taxes.

50,000 euros is only £40k so would not be in the upper tax bracket in this country and $50k is only £31k so again a completely unfair comparison.

drc

ILW wrote: »

Think if you compare to France or some of the Scandinavian countries it would be different.

Yes of course but I was just surprised at how much tax and NI we pay in the UK. And then we pay even more tax in the form of council tax, VAT, car tax to name but a few. Where does it all go? How come the US and Germany can have a fairly well functioning society without high taxes? I know the Americans have to pay for health care separately but it can't be that much and presumably they get much better quality care as they can choose what to pay for and which insurance to go with?

drc

somethingcorporate wrote: »

£50k is twice the average wage in the UK so to call it "just above average" is completely wrong.

Plus, you cannot compare 50,000 applies to 50,000 oranges. One pound does not equal one euro or dollar, so do the appropriate conversion and then apply the taxes.

50,000 euros is only £40k so would not be in the upper tax bracket in this country and $50k is only £31k so again a completely unfair comparison.

I used £50k as it is approx the minimum of what you need to be able to live on in London with several children. What I am trying to say is that someone in the US on a comparable wage would have much more disposable income as would someone in Germany. They also have much better quality of life, housing etc in my opinion of what I have seen of both countries. I just don't understand where all the money that is taken in tax and NI goes to in this country?

somethingcorporate

But I don't think your figures make any sense.

£50k in the UK you end up with take home of £35,778 which is 71.5%

If you convert that to dollars you end up with $80,990 pa with a take home of $62,574 which is 77%.

The difference is only 5.5% and out of this you get the NHS - seems like a reasonably good deal to me.

Or, if you do it based on $50k dollars in the US you keep 82% of gross pay compared to 76% of an equivalent UK salary (£31k) which is a bigger margin but still, a reasonable price to pay for the NHS.

This huge gap only appears to be in your apples and pears calculations.

davey_b

We still pay far too much though, so the more people complaining the better.

somethingcorporate

Well, not really. If they cut income tax where do you expect them to get the money to fix the huge deficit from?

Increase VAT? Corporation Tax? all have massive downsides.

Taking a single point of view is completely blinkered when it comes to considering macroeconomic policies of a nation and it will never be solved by pulling a single lever.

drc

somethingcorporate wrote: »

But I don't think your figures make any sense.

£50k in the UK you end up with take home of £35,778 which is 71.5%

If you convert that to dollars you end up with $80,990 pa with a take home of $62,574 which is 77%.

The difference is only 5.5% and out of this you get the NHS - seems like a reasonably good deal to me.

Or, if you do it based on $50k dollars in the US you keep 82% of gross pay compared to 76% of an equivalent UK salary (£31k) which is a bigger margin but still, a reasonable price to pay for the NHS.

This huge gap only appears to be in your apples and pears calculations.

Do you think? I don't think the NHS is that great and it is not completely free, you have to pay for a lot of things still, even after paying all that tax and NI.

lvader

My annual salary is quite a bit more than that and I don't pay nowhere near that amout of tax. I'm PAYE and don't file a tax return.

somethingcorporate

drc wrote: »

Do you think? I don't think the NHS is that great and it is not completely free, you have to pay for a lot of things still, even after paying all that tax and NI.

Most people will take far more out of the NHS than the put in.

And compare it to the cost of private treatment! Then you can see which is best.

Plus, it provides a safety net for those that could not afford to pay their way - in the US if they cannot afford it they have to lump it - at least here we provide provision for all.