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iknowtax.com

UK Tax & NI Calculator 2018 - 2019

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Tax paid
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Total deduction
You Take Home
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2018 - 2019 income tax and NI calculator UK

Welcome to iknowtax.com where you will find Tax and NI calculators containing the latest official rates from the HMRC. It allows you to calculate your net income after tax and see what the taxman is taking. You will find lan easy to understand table showing the tax rates for 2018 - 2019 and the previous years.

If you like this website please share the link and tell your friends, family and colleagues. This will keep this website alive and help improve ranking on search engines. What would you like to see on this website, let me know by emailing me at admin@iknowtax.com.

National minimum wage rates per hour from April 2018:

  • 7.83 for 25 years and older
  • 7.38 for 21 - 24 years old
  • 5.90 for 18 - 20 years old
  • 4.20 for under 18 years old
  • 3.70 for apprentice

How is tax calculated? I'm confused 😕

You have come to the right place! This is the first stop for you to understand about tax rates and how it is calculated. You can learn from scratch here. After reading this page you can then search and ask specific questions on Google about tax. You will know what you're doing!
Understanding and calculating tax can be quite complicated so this website will lift you off the ground and get you knowing. ☺

Your tax is calculated after deducting your Personal Allowance. Everyone has Personal Allowance unless you are earning over 100,000 (which your personal allowance starts to deduct bit by bit until it reaches zero).
Your tax is calculated on your salary (or earning) left after taking away your Personal Allowance amount from your salary (Personal Allowance is the amount of your salary where tax is not applied, making anything in that amount a tax free income) (Don't get confused; personal allowance doesn't mean that you get this amount as extra money coming to you, it is the part of your income (salary/earning) where the tax does not apply; is called Personal Allowance).
Example, your salary is 35,000 per annum, your Personal Allowance is 11,850 per year; so 35,000 - 11,850 = 23,150. So on 23,150 is the amount where the tax will be taken from as a percentage (detailed examples below). Still, more is deducted for your National Insurance Contribution (NIC) if you have not reached the state pension age. The amount for National Insurance is deducted as a percentage on salary above 162 per week (701.94 per month / 8424 per year). Look at the tables below.

🤔It's a myth: It is sometimes better to not earn more, by getting a higher paid job or a second job because you will lose out by paying more tax

🤔Also it is not true that student do not get taxed. Students do get taxed like everyone else once their earning has gone above the tax free personal allowanace and tax free NI thresholds. As students usually work part-time hours they earn less which is usually below the personal allowance amount which is tax free thinking they dont get taxed. When they earn more during holidays by working more hours their pay goes above the tax free threshold and get taxed.

Personal Allowance 2018 - 2019

What is Personal Allowance? Personal Allowance is the portion of your earning where tax is not applied, making that portion of your earning tax free.

Earning Personal Allowance (per year)
If you are earning up to 100,000 11,850
If you are earning between 100,000 and 123,700 Decreases from 11,850 by 50% of every pound you earn (above 100,000) until it reaches 0
If you are earning 123,700 or more 0
Blind person receive an additional amount of 2390 on top of the personal allowance

See example #1

Taxable Income/Income Tax

Taxable income is your earning where tax can be applied to.
These are some that counts as taxable income: income from employment, self employment/partnership, pension, investment earning, rental property, state benefits. For more information visit: https://www.citizensadvice.org.uk/debt-and-money/tax/what-is-taxable-income/taxable-and-non-taxable-income/.

Tax Rates 2018 - 2019

These rates apply to different portions of your earning

Your earning [per year after taking away your Personal Allowance amount from your earning] Tax Rate 2018 - 2019 That is
Under your Personal Allowance amount No tax taken 0
0 - 34,500 20% Basic rate
34,501 - 150,000 40% Higher rate
over 150,000 45% Additional rate

Example: Salary minus Personal Allowance: 35,000 - 11,850 = 23,150.
So on 23,150, 20% tax rate will apply as you can see on the table above this amount falls between 0 - 34,500.

Example 2: Salary minus Personal Allowance: 50,000 - 11,850 = 38,150.
On this amount (38,150), 20% will be applied to up to 34,500 and on the remaining amount it will be 40%.
Like this: 20% of 34,500 (out of 38,150), and 40% of 3650 (remaining of 38,150 minus 34,500). So the tax paid will be 8360. See the illustration below.

Image below illustrates the portion of the salary (50,000) where the tax rates are applied and deducted
2016 - 2017 tax example graph illustration

See example #4 | Does Tax or NI come out first?

National Insurance Rates 2018/2019

National Insurance Contribution is payable by everyone, until you have reached the state retirement age. National Insurance pays for your state pension and other state benefits.

These rates apply to different portions of your earning

Your Earning [Per year] National Insurance Rate That is
Earnings up to 8424 0% No National Insurance contribution is payable
Earnings between 8424 and 46,384 12% Salary minus 8424 = X, 12% of X
Earnings 46,384 or more 2% 46,384 minus 8424 = 36,868, 12% of 37,960 plus salary minus 46,384 = X, 2% of X

Below the above table is presented in a different way (it makes it a little easier to see how to apply NI rates on your earning) :

Your Earning [Per year, after subtracting 8424] National Insurance Rate That is
Below 0 0% No National Insurance contribution is payable
Between 0 and 37,960 12% Salary minus 8424 = X, 12% of X
Between 37,960 or more 2% 46,384 minus 8424 = 36,868, 12% of 37,960 plus salary minus 46,384 = X, 2% of X

How to calculate tax?

Here are examples of how Tax and NI is calculated, so you can work out your take home/net pay:

#01 If I earn 5000 per year, how much tax do I pay:
You have personal allowance of 11850.
Because your salary is below the Personal Allowance amount, you will not pay tax.
Salary minus Personal Allowance; 5000 - 11850 = below 0, so there is no amount left to tax on.
You will also not pay any National Insurance contribution because you are earning below 8424.
So you keep exactly 5000.

#02 If I earn 15,000 per year, how much tax do I pay:
You have personal allowance of 11850.
Now to calculate how much tax is due from you, you need to take away Personal Allowance amount from your salary (Salary minus Personal Allowance): 15,000 - 11850 = 3150
So 3150 is the amount where tax will be taken from.
The tax rate will be for you is 20%.
So 20% of 3150 is 630 (3150 0.2 = 650). So the tax due is 630.
Now to see how much money is left for you to take home, you need to also calculate the amount of National Insurance contribution that will be taken from you.
Your salary is more than 8424 and less than 46,384 so the National Insurance rate will be 12%.
Any amount below 8424 you don't pay National Insurance.
So to apply the 12% rate you will need to deduct 8424 from your earning.
That will be 15,000 - 8424 = 6576. 6576 is the mount where the 12% will be applied to deduct the amount for NI. So 12% of 6576 is 789.12 (6576 0.12 = 789.12).
Now you can work out how much you take home/ your net pay: Salary - Tax - NIC:
15000 - 630 - 789.12 = 13,580.88

Is NI deducted after taking out tax? NI is not deducted after your tax, or vice versa. -NI is not calculated and deducted on your earning remaining after the tax deductions. The NI calculations are applied to your full amount of your salary.

#03 If I earn 25000 per year, how is tax and NI calculated:
Your personal allowance is 11,850.
Subtract your Personal Allowance amount from 25,000.
25,000 - 11850 = 13,150
Now on 13,150 is where the tax will be deducted from. 20% tax rate will apply.
20% of 13,150 is 2,630. 2,630 is deducted for tax.
For National Insurance (NI); Subtract 8424 from 25,000.
That equals to 16,576. On this amount 12% will be deducted for NI.
12% of 16576 is 1989.12. For NI 1989.12 is deducted.
Total deduction is 2630 + 1989.12 = 4,619.12.
You take home 20,380.88

Old rate is used below:

#04 If I earn 60,000 per year, how is tax and NI calculated:
Your personal allowance is 10000.
Tax rate of 20% and 40% will apply. See the Tax Rates table above
To calculate how much tax is due from you, you need to take away your Personal Allowance amount from your salary: (Salary minus Personal Allowance); 60,000 - 11,000 = 49,000.
49,000 is the amount where tax will be applied to.
Now 20% tax rate is applied to 32,000 out of 49,000. See the Tax Rates table above.
So 20% of 32,000 is 6400 (32,000 0.2 = 6400).
Now 40% tax rate is applied to the amount over 32,000 (of 49,000), that is 17,000 (49,000 - 32,000 = 17,000).
So 40% of 17,000 is 6800 (17000 0.4 = 6800).
Total tax due is 13,200 (6400 + 6800).
For National Insurance contribution, 12% rate is applied to salary between 8060 and 43,004 and the 2% rate is applied to amount of the salary above 43,004.
Earning below 8060 you don't pay National Insurance contribution.
So the the 12% rate will apply to amount between 8060 and 43,004 of your earning. And 2% above 43,004.
Amount between 8060 and 43,004 is 34,944 (43,004 - 8060).
On 34,944 12% is deducted. 12% of 34,944 is 4193.28 (34,944 0.12).
The 2% rate applies to your earning from 43,004 to 60,000. Which is 16,996 (60,000 - 43,004).
2% of 16,996 = 339.92 (16,996 0.02).
For National insurance contribution; 4533.20 (4193.28 + 339.92) is deducted from your earning.
Finally you can work out how much you take home: [Salary] - [Tax] - [NIC]:
60,000 - 13,200 - 4533.20 = 42,266.8

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Comments

Newest | Oldest   Helpful   Positive | Critical
Chris says...
Many thanks for this, confirmed one or two things for me (tho still looking for a good calculator for working 2 PAYE jobs inc pension contributions etc... suggestions?)

Comment mostly to point out a typo, example #3

\"You take home £22,932.04 (£30000 - £4379 - £22688.96 = £22932.04, your net pay)\" should read \"You take home £22,932.04 (£30000 - £4379 - £2688.96 = £22932.04, your net pay)\", you have over deducted by £20,000

9th January 2013 11:13am
iknowtax.com says...
I will soon update the calculator to add some new feature and I will also add later a feature to help calculate 2 PAYE jobs tax

Thanks for letting me know about the typo. I now amended the text.

12th January 2013 8:01pm
Anonymous says...
Great site. Many thanks
6th January 2013 5:43pm
Anonymous says...
If I fill out a self assessment tax return do I take NI off as one of my expenditures so to speak? Or do I get taxed on it even though I don\'t get to include it as part of my earnings?
2nd January 2013 5:41pm
Peter says...
Thank you, this has helped me so much. There is not clear advise on the HRMC and was causing me concern. Wish HRMC was this clear. Thanks
23rd December 2012 6:57pm
Anonymous says...
I am one of hundreds of temporary workers about to transfer to an Agency whereby the insist you sign up to their expense scheme otherwise you are not able to work for their client who we were all previously employed by direct.As a result those who are already on this Agency\\\'s books are paying no tax and a minimal amount of NI.I have broached this with the company direct and they ensure me it is correct. I am concerned about receiving a tax demand at end of year and not having enough contributions for JSA in short term and pension long term. Can you advise or point me in direction where I can get an answer?
21st December 2012 8:30am
iknowtax.com says...
Hi there, I am not sure if I understood your question properly, sorry, let me know if I got your question wrong.
When you get a job through an agency working temporarily, you are able to claim expense to lower your tax you have to pay and also your NI. You will be classed as self-employed.
I will try and create a page for expenses.
See http://www.hmrc.gov.uk/incometax/relief-self-emp.htm and http://www.hmrc.gov.uk/briefs/income-tax/brief2409.htm
31st December 2012 8:48pm
roy williams says...
found it very confusing i just needed a ave % to deduct each month to give me a rough idea what to take off my pay each month
20th December 2012 10:15am
iknowtax.com says...
Hi Roy, I am afraid there is no single percentage to apply to your earning.
Different percentage apply to different parts of your salary (there is an illustration above).
The overall percentage will be different for every amount of pay.
What you can do is use the calculator above to see how much Tax and NI in total is deducted from salary to find total percentage is deducted from your salary. If you get paid different amount each month, the total percentage deducted will be different.
Please do see any of the examples above.
Let me know if you have any questions.
31st December 2012 8:30pm
Tomas says...
Excellent job. This website and information mentioned are so usefull and easy understandable:) I have some question, what should people do, if they have a regular job, but they are not registered for paying tax and insurance by employer?
Thanks for reply on my email
19th December 2012 8:51pm
Page 62 of 74  (732 comments)

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Disclaimer: I am not a tax professional, so please do not use this information to make any big decisions. Do consult a professional when making any big decisions.

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i know tax calculator web logo 2011

Learn and teach yourself how the PAYE Tax and National Insurance (NI) is applied to your salary.

UK Tax year 06 April 2018 to 05 April 2019.

Kashem Shah