How Much Cana New Employee Earn Before Getting Taxed

[dieseldick]

is it true that someone can earn up to 9k before getting taxed if they have not worked in the previous year ?

[boxtops]

Any of us can earn up to £10000 in the current tax year, if you are a normal taxpayer, without paying tax. What you were paid (or not) last year has nothing to do with it.

[Buenchico]

Nobody pays tax on the first £10,000 of their annual income.

However it would clearly be daft to deduct no tax for month after month (until £10,000 had been earned in that tax year) and then to knock 20% off everything earned for the rest of tax year.

So the system allocates an allowance of £833.33 per month (or £192.31 per week, for weekly paid employees) as 'tax free' by dividing £10,000 by 12 (or by 52, as appropriate).

If someone doesn't earn more than that throughout the whole tax year then they'll pay no tax.

If they initially earn more than that they'll pay tax on the excess but they'll get it back later if their income then drops so that their total pay for the year is less than £10,000.

If they earn very little during the first part of the tax year they'll effectively be 'in credit' for tax purposes if they start to earn more later on, so they'll still not have to pay any tax if their total pay for the year is less than £10,000.

[buildersmate]

What a brilliantly clear explanation by BC. First class.

[Peter Pedant]

yeah well spotted BC
brill as BM says

so why am I paying tax from week one ?

You may have walked in without a tax code so they take tax without any monthly allowance....

so make sure you have a tax code -

and often they dont take the month of the year (!!) into account.
Start in Jan for example - three months employment may well not take you over the £9 grand allowance but you will still pay tax and so you may need to claim it back...

Did I say well done for getting a job after a year or so jobless ?

and remember your March pay slip wil contain all the infor needed for tax purposes so always keep that along with the P60 you get in May

[murraymints]

and remember tax year begins April 5....if you need to make enquiries talk of ritys....relevant income tax years

[Hypognosis]

The old routine is that they'd put you on an 'emergency' tax code when you start work. I've known people who've not heard of this and it's taken them the best part of the year to notice that they're struggling to get by, compared to all their workmates.

People don't generally like to let others see their payslips but this is a justifiable case of needing to 'compare notes'. Especially in a work structure where there ate pay grades and everyone is supposed to be on the same rate, give or take age and years' service. (For privacy's sake, make it betwee you and your line manager).

Once proven to be wrong, or suspect, just write to your tax office (your payroll staff will advise which address) and they will reassess you and refund any overpaid tax. (Like the Jan-March situation, above).