Learn everything about the taxes you pay


sandiegoapa.com keyword stats



Most current MSN search phrases:

types of taxes what types of different taxes are there

How Much is Tax on Income, Tax Percentage Rates and Income Returns

Income tax is deducted by an employer fromemployer under the tax inland revenue PAYE
the gross salary of an employee according toscheme other income is also taxable and
the inland revenue tax percentage applicabledeclared on the annual tax income returns.
to those earnings taking into accountItems declared on the income returns would
personal tax allowances and reliefsinclude income from savings, dividend income,
available. Income Tax percentage rates forpension and trust income, any rental income
Employees All employers in the UK payand self employed earnings. Working tax
employees through the inland revenue tax PAYEcredits are not classed as taxable income.
system and are required to deduct both tax onDetermining how much is tax on income from
income and national insurance contributionssavings is achieved by applying the income
from the gross wages. The net wages receivedtax percentage applicable after deducting
are by the employee after the PAYEgross earnings from the tax inland revenue
deductions. Gross pay is the total amount thethreshold limits. If non savings income is
employee has earned in that pay periodless than the £2320 starting rate for
including the basic wages plus any tips orsavings or if savings and dividend income is
bonuses received but excluding non taxablethe only source of income then the savings
expenses. The gross pay on which an employeeincome tax percentage is 10 per cent up to
is assessed from tax and national insurancethe £2,320. If non savings income is
includes taxable benefits received by thatabove the starting rate then all of savings
employee such as private medical care or theare taxed at the 20 per cent basic rate. When
provision of a company car. Non taxableearnings exceed the higher tax threshold of
expenses being business expenses the employee£34,800 the income tax percentage on
has incurred carrying out the duties whichsavings increases from 20 per cent to 40 per
are reimbursed by the employer. Havingcent and on dividends from 10 per cent to
established the total gross pay the employer32.5 per cent. In effect how much is tax is
calculates how much is tax on income anddetermined by the highest tax percentage
deducts tax on a cumulative basis taking intoapplicable to income. National Insurance for
account the employee personal allowanceEmployees While tax on income is calculated
indicated by the tax code. Business expenseson a cumulative basis national insurance
incurred by an employee which are notcontributions are calculated as a percentage
reimbursed by an employer may be claimed as aof gross salary in a specific pay period
tax relief. Such items might include theunder the tax inland revenue system.
difference between the UK allowance onEmployees under the age of 16 or over the
mileage of 40p per mile and the amount paidnational pension age of 65 do not pay
by an employer is less than 40p and alsonational insurance, they are exempt. There
working from home expenses. The tax codeare other circumstances where an employee
tells the employer how much is the UKpays a different rate of national insurance.
allowance to free pay the employee isFor example a married woman who is widowed
entitled to in the financial year. Forand possess a certificate may pay national
example a 2008 tax code of 603L wouldcontributions at the rate of 4.85 per cent of
indicate annual tax free earnings ofgross wages on earnings above the primary
£6,035. That does not mean the employeestarting threshold. Employees with a second
will not be deducted tax until earnings reachjob where the earnings are above the upper
that figure as when calculating the tax onearnings threshold would only pay 1 per cent
income the employer is required to spread theinsurance. For most people who are employed
tax free allowance evenly over the paythe national insurance contribution is
periods. On earnings above the tax freeaccording to the rates set in table a and the
allowance the 2008 tax percentage is 20 peramount payable is 11 per cent of gross
cent up to what is known as the higherearnings about the primary threshold and on
earnings threshold which under 2008 tax rulesall earnings up to the upper earnings
is £34,800 per annum. Gross salary whichthreshold from which point the percentage
is above the higher earnings threshold isdrops to 1 per cent. In 2008-09 the primary
subject to a 2008 tax rate of 40 per cent. Inthreshold is £105 per week.
addition to the tax on income deducted by an



1 A B C D E 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127