Average UK salary - a guide

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Average UK salary - a guide


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Old 3rd November 2010, 10:16 PM
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Default Average UK salary - a guide

I thought this might be useful as a guide to what people earn in the UK. I see some crazy figures being banded about sometimes, telling you that 45000 can be considered poor (when it's 20k more than most people get), so here's the official figures on what people earn in the UK. Obviously, some professions earn more than others, other places are more expensive than others etc etc but here's the basic facts based on the last year or two:

Part-Time (PT) workers drag the figures down considerably, so I'll concentrate just on Full-Time (FT) wages.

Mean average for FT workers = 31,323 but that figure is artificially raised by ultra-high earners (high-flying bankers, football players etc). So, the median average wage is 25,123. So 50% of FT workers earn below that.

31,759 would get you into the top 25% of FT earners and 44,881 is enough to get you into the top 10%. Earn 118,027 and you're in the top 1%, with only 0.6% of people in the 150,000 where tax is 50%.

And, of course, 40% is only on earnings over 37,400, not on the whole salary (it might be obvious to you but I know some that don't realise that). Similarly the 50% tax on over 150k.
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Old 3rd November 2010, 11:45 PM
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Quote:
Originally Posted by starchief View Post
And, of course, 40% is only on earnings over 37,400, not on the whole salary (it might be obvious to you but I know some that don't realise that). Similarly the 50% tax on over 150k.
Except that if you earn over 100,000, your personal allowance of 6475 is eroded by 1 for every 2 you earn, so it disappears altogether at 112,950. So you are taxed at 20% on the first 37,400 and 40% above that, which means you are effectively taxed at 60% from 100,000 to 112,950.
Budget 2009 | Deloitte | Personal allowances - withdrawal for those earning 100k or more
The coalition government has further announced measures to increase taxes and cut allowances esp for medium to high earners.

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Old 12th November 2010, 10:06 PM
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If your earning £150k+ and paying 60% tax you need an new accountant!

Steve

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Old 13th November 2010, 10:40 PM
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Is your personal allowance deducted first and the amount over £37,400 taxed at 40% ?

So if you earn 50k the amount taxed at 40% is (50,000 - 37,400 - 6,475) ?

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Old 13th November 2010, 11:06 PM
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Your personal allowance comes off first, then u pay the base rate of tax to the 1st limit then the higher rate of amounts over this limit.

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Old 13th November 2010, 11:20 PM
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Quote:
Originally Posted by jdripper View Post
Is your personal allowance deducted first and the amount over £37,400 taxed at 40% ?

So if you earn 50k the amount taxed at 40% is (50,000 - 37,400 - 6,475) ?
Yes, though it's better to think of deducting your personal allowance of £6475 first from your gross pay of £50000, leaving £43525 as taxable. Of this the first £37400 is taxed at 20% and the rest at 40%, so you are taxed at 40% on £43525 - £37400 = £6125.
In another word, income tax is progressive, and you are only taxed at a higher rate on that portion of your income after deducting your personal allowance and the part taxed at the standard rate.
This is not the case for some other kinds of taxation, such as stamp duty on buying properties. While a property costing from £125,001 up to £250,000 is taxed at 1%, if the price exceeds by even £1, the whole of your property is taxed at the new rate of 3%, not just on the part exceeding £250,000.


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Old 14th November 2010, 11:11 AM
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Quote:
Originally Posted by Joppa View Post
Yes, though it's better to think of deducting your personal allowance of 6475 first from your gross pay of 50000, leaving 43525 as taxable. Of this the first 37400 is taxed at 20% and the rest at 40%, so you are taxed at 40% on 43525 - 37400 = 6125.
In another word, income tax is progressive, and you are only taxed at a higher rate on that portion of your income after deducting your personal allowance and the part taxed at the standard rate.
This is not the case for some other kinds of taxation, such as stamp duty on buying properties. While a property costing from 125,001 up to 250,000 is taxed at 1%, if the price exceeds by even 1, the whole of your property is taxed at the new rate of 3%, not just on the part exceeding 250,000.
And on top of Income Tax there are the National Insurance deductions (on band earings - between 97 & 844 per week for tax year 2010/11) , which are really just tax by another name, payable at a rate of 11%.

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Old 15th November 2010, 09:32 AM
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The easiest way to understand the total and marginal impacts of tax and NI can be to use one of the purpose-built calculators, such as UK PAYE Income Tax Calculator 2010 salary calculator UK. Updated for 2010 / 2011 tax year. Calculate wages pension national insurance and student loan repayments online. (other tax calculators are available).

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Old 15th November 2010, 11:56 AM
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Slightly off topic, but I had many of my Brit expat friends in France say how much less taxes you pay in the UK.
From what I see now this is not true at all. Well, it might be true if your salary is in the £90k range, but for those of us in the £35/£55k range it's not the case.

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Old 15th November 2010, 12:04 PM
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OH and also concider the hact that if one paretn earns over 45k then childbenefit is cut... nice!

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