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tax rate

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munish | 12:30 Sun 26th Feb 2006 | Jobs & Education
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how much percentage tax does the goverment charge per month at salaries

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I'll try to answer both your questions in one.

I've assumed that you've got a basic tax code and that, when you refer to your pay as �957 'per month', you actually mean '4-weekly' (so there are 13 payments in a year, rather than 12). [If you really do monthly, I've quoted the revised figures at the end].

So, a few sums:
You earn �957 x 13 = �12441 per year.
The tax man lets you earn the first �4895 without paying any tax on it
The next �2020 of your pay is only taxed at 10%, so this gives us the first �202 of tax to be paid.
The remainder of your pay = �12441 - �4895 - �2020 = �5526. This is taxed at 22%, which gives another �1215 tax to be paid.

So, the total tax for the year = �202 + �1215 = �1417.
Spread over 13 4-weekly payments, this means that the tax on each payment will be about �109.

National Insurance will be deducted at the rate of �16 per week = �64 per 4-weekly period.

So your total deductions for tax & NI will be about �109 + �64 = �173.

So your pay, after these deductions will be about �957 - �173 = �784.

As I've said, the above figures are based on 'monthly' actually meaning '4-weekly'. If you're actually paid once every calendar month, the tax man will take about �100.50 per month and your NI contribution will be �60.50, leaving you with about �796 per month.

(NB: Some married women can pay less National Insurance than the figures I've quoted).

Chris

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