What pay is taxable? - London

Saturday, 17 December 2016

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City: London, England
Offer type: Offer
Price: £150


Contact name Rajesh Vekaria
Phone 020 8200 0016

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Finsol Tax Advisor is one of the leading independent firms of Accountants in London and tax advisors and statutory auditors.
Find out how your take-home pay is calculated, which payments are subject to income tax and which payments are tax-free.
As an employee, most of the tax you pay disappears from your pay packet before you ever see it.
You ‘pay as you earn’, or PAYE. Your employer deducts income tax straight from your pay - called 'at source' - along with National Insurance contributions and any other deductions.
Here, we explain how your take-home pay is worked out and which payments from your employer are tax free.
PAYE: It is the automatic deduction of income tax.
You'll be charged at 20%, 40% or 45% - depending on how much you earn - on all taxable income, less your personal allowance and any deductions that qualify for tax relief.
In the example above, income tax is charged at 20%, less a personal allowance of £10,600 (demonstrated by the tax code 1060L), pension contribution and a charitable donation giving.
National Insurance:
National Insurance is deducted each pay period if your earnings are over a certain amount. In 2016-17, the threshold is £8,060 (so £155 a week or £671 a month). Although some payments, such as pension contributions, qualify for income tax relief, there is no relief from National Insurance.
In the example above, Class 1 National Insurance Contributions are deducted at a rate of 12%.
Our accountant offer accountancy services, tax & audit advice to businesses, self employed individuals and families in London. To know more about our services contact us any time, we provide the perfect answer of your query.