Advice on Tax & NI Contributions

msaquib

Hi,

Just need to know how the Tax & National Insurance are calculated on pay? Example if someone is getting £140.00 1st week of there job. What will be tax and insurance?

Thanks
M

System

It all depends on what tax code is being operated.

If you are under 65 then your 08/09 tax code should be 543L. This means that the first £5435 of your income in 08/09 is tax free.

HMRC spread this over a year so £5435/52 wks = £104.52 tax free per week

If your pay is £140 then you would pay 20% tax on

£140 - £104.52 = £35.48 = £7.10 tax

NI is charged at 11% on income over £90 per week so you would pay

£50 x 11% = £5.50 NI

TOTAL = £7.10 + £5.50 = £12.60

If the employer operates a BR (basic rate) code then the tax would be

£140 x 20% = £28.00 tax

And the total would then be £28 + £5.50 = £33.50

If the employer operates the BR code then you need to contact your tax office to get your tax code amended asap.

CLAPTON

just to say you pay NI at 11% on the amount over 105 per week so your NI will be £35 x 11% = £3.85 per week

msaquib

Pam17 wrote: »

It all depends on what tax code is being operated.

If you are under 65 then your 08/09 tax code should be 543L. This means that the first £5435 of your income in 08/09 is tax free.

HMRC spread this over a year so £5435/52 wks = £104.52 tax free per week

If your pay is £140 then you would pay 20% tax on

£140 - £104.52 = £35.48 = £7.10 tax

NI is charged at 11% on income over £90 per week so you would pay

£50 x 11% = £5.50 NI

TOTAL = £7.10 + £5.50 = £12.60

If the employer operates a BR (basic rate) code then the tax would be

£140 x 20% = £28.00 tax

And the total would then be £28 + £5.50 = £33.50

If the employer operates the BR code then you need to contact your tax office to get your tax code amended asap.

Thanks for this. Nice and easy to understand

How would you deduct National Insurance if paid monthly?

M

CLAPTON

monthly NI is 11% over £453