Thursday, 16 March 2017

Real Tax Rates 2017/18

Six and a half years ago, I posted a summary of how much tax is actually paid at the various earnings levels. I thought it might be time to update it.


Earnings Marginal rate 2017/18 inc Employer's NI
up to £8,060 0% 0%
£8,061-£8,112 12.00% 12.00%
£8,113-£11,000 12.00% 22.67%
£11,001-£43,000 32.00% 40.25%
£43,001-£43,004 52.00% 57.82%
£43,005-£100,000 42.00% 49.03%
£100,001-£122,000 62.00% 66.61%
£122,001-£150,000 42.00% 49.03%
£150,001+ 47% 53.43%

There's a big bump between £100k and £122k as the personal allowance is withdrawn, and the slightly different banding between NI and Income Tax makes for a few oddities. Overall the levels are higher than you might think.

Note: This was calculated using the weekly NI limits, and it is worth noting that if your income is not spread evenly over all of the weeks of the year, you may wind up paying additional NI. Also those with low incomes may face severe benefit withdrawal rates taking their effective tax rate up a lot higher than indicated here.

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