Do I still have to pay national insurance and tax?

NI is due based on how much you are paid in the week or month regardless of what you earned in previous periods.

Jp789 wrote: »

Hello guys,

So I have just gotten a new job for around 40k a year. I’ve been out of work for just over a year so when I start my wages would be the first bit of money I have earned all year.

I understand that people who earn under £11,000 do not have to pay tax until they earn over that amount.

My question is once I start my new job can I receive tax free money until I reach the 11k mark? Or would I have my tax deducted from the get go?


Also will I also have to pay my national insurance from the outset too or could I have that waived too until I reach 11k in earnings?

You do not say if you have been receiving a taxable benefit eg unemployment benefit. If you have then you will get a P45 from them when you sign off, give this to your new employer. This will have your tax code and details of taxable income for your new employer to use. If no taxable income you can declare this on a starter checklist and your new employer can then use the emergency tax of 1185L on a cumulative basis.
The normal tax allowance for this year is £11850 but you will not get the full allowance until the end of the tax year.
Assuming that you are on a cumulative tax code and for example your first payday was in month 9 of the tax year Dec 6 to Jan 5 you get a tax allowance of 9/12 of the full amount £8887.50 ( the PAYE system actually gives you a little bit more than this) month 10 you get 10/12 month 11 11/12 and for month 12 you get the full amount. Tax is not payable until your monthly taxable pay to date goes over these monthly allowance figures.
There may be a delay in your tax code being put on a cumulative basis and you are on a non-cumulative tax code then you get 1/12 of the £11850 for each month to set against your monthly taxable income and pay tax if it is greater than that. Eventually your tax code will be changed to cumulative and your tax position re-calculated and adjusted. Sometimes this may not happen until after the tax year has finished.
There are circumstances when your tax code may be something different to the 1185L if that applies HMRC will issue a different code any adjustments needed will be made to the tax you pay.

NI is not the same as tax. This is always done on what you earn at each payday, there is no annual figure as with tax. You get an allowance each payday and pay NI on earnings above this figure.

00ec25 wrote: »

how can you have been employed in the past, now apparently worth 40k in salary, yet still have no idea how your pay is taxed?

read one of the many pages that explain it

https://www.litrg.org.uk/tax-guides/tax-basics/what-tax-rates-apply-me

https://www.moneyadviceservice.org.uk/en/articles/tax-and-national-insurance-deductions

https://worksmart.org.uk/pension-advice/tax/income-tax/how-my-income-tax-calculated

https://www.citizensadvice.org.uk/debt-and-money/tax/income-tax-how-much-should-you-pay/income-tax/

Many people have difficulties understanding how Tax & NI is calculated, especially if they have been PAYE and have had minimal/no contact with HMRC. I also don't think their salary dictates how much they should know about taxation.

01afraser4 wrote: »

Many people have difficulties understanding how Tax & NI is calculated, especially if they have been PAYE and have had minimal/no contact with HMRC. I also don't think their salary dictates how much they should know about taxation.

I disagree, tax is one of those things that ignorance is not an excuse.


You should have a general or basic grasp of how your salary is calculated. How do you know if your getting a raw deal?


Knowing what you can and can't claim for work is important and every little helps.




Failing asking on an internet forum full of strangers, get paid tax advice from an accountant which is tax deductible in some circumstances