What Tax Will I Pay
The Personal Allowance for 2022 to 2023 is £12,570 (£241 per week) The tax code is 1257L.
If your tax code is BR or 0T it may be because you may have not completed a New Starter form,handed in a P45 or the HMRC have notified us.
Please note as you are paid weekly your tax free allowance is broken down into weeks. So if the standard tax code is 1257L it means that you can earn £241 per week tax free before deductions.e.g. 1257L = £12,570 / 52 working weeks in a year = £241.38 tax-free Personal allowance per week.
Nearly everyone who lives in the UK gets a tax-free Personal Allowance.This is the amount of income you can receive without having to pay tax on it.
Your tax-free Personal Allowance is spread equally over the tax year.
If you are interested in calculating your tax you can use this calculator tool - http://www.listentotaxman.com/
Please note if your Tax code has wk 1 , It is advised that you complete your timesheets on a weekly basis, for example if you enter timesheets for 2 different weeks in the same payroll week you will only receive £241 tax free instead of £482 tax free.
I live in England, Wales or Northern Ireland – what's my income tax rate for 2022/23?
| EARNINGS (IF YOU LIVE IN ENGLAND, WALES OR NORTHERN IRELAND) | RATE |
|---|---|
| Under your personal allowance (PA) For most, £12,570 caluclated weekly £241 pw | No income tax payable |
| Between PA and PA + £37,700 (basic rate) For most, over £12,570 to £50,270 | 20% |
| Between PA + £37,701 and £150,000 (higher rate) For most, over £50,270 to £150,000 | 40% (1) |
| Over £150,000 (additional rate) | 45% |
(1) Personal allowance drops by £1 for every £2 earned over £100,000.
I live in Scotland – what's my income tax rate for 2022/23?
| EARNINGS (IF YOU LIVE IN SCOTLAND) | RATE |
|---|---|
| Under your personal allowance (PA) For most, £12,570 caluclated weekly £241 pw | No income tax payable |
| Between PA and PA + £2,162 (starter rate) For most, over £12,570 to £14,667 | 19% |
| Between PA + £2,163 and PA + £13,118 (basic rate) For most, over £14,667 to £25,296 | 20% |
| Between PA + £13,119 and PA + £31,092 (intermediate rate) For most, over £25,296 to £43,662 | 21% |
| Between PA + £31,093 and £150,000 (higher rate) For most, over £43,662 to £150,000 | 41% (1) |
| Over £150,000 (additional rate) | 46% |
(1) Personal allowance drops by £1 for every £2 earned over £100,000.
Do Students have to pay Tax on Part-Time jobs?
HMRC have now withdrawn PAYE and NI concessions for students.
As of April 2013 students will be treated in the same way as all other employees for PAYE tax and National Insurance contributions purposes.
I think I am being taxed too much?
The first thing to check is your Tax code on your most recent payslip. If your Tax code is BR (Basic Rate) or 0T it means you are being emergency taxed.
This may be because:
1 - You have not submitted your P45 or New Starter Checklist to payroll
2 - You have declared you are working in another job where your earnings are higher
3 - The HMRC have notified us to change your tax code to a lower tax threshold allowance
Another reason may be because you have submitted 2 or more timesheets in one week.
If you would like to discuss your tax further please contact [email protected]
Who do I talk to about claiming Tax back?
There are various ways to claim tax back. You may have been taxed heavily as we may have not received a New Starter Checklist or P45. If this is the case please complete a New starter checklist and depending on what statement you declare you could get your tax back in your next wage, otherwise we will wait to hear from the Tax office to inform of your correct tax code.
Claiming tax back from previous years?
The time limit for making a claim is five years from 31 January following the 5 April end of the tax year. For example, a claim for 2003-04 must be made by 31 January 2010. What you will need to do is contact the tax office and tell them you believe you can claim some tax back. They will instruct you what you need to do.
Can I claim tax back for someone else?
You can claim tax back on behalf of someone else if you are:
the parent of a child (under 16 in Scotland or under 18 in England, Wales and Northern Ireland)
the next of kin of someone who is incapable of managing their own affairs
a relative of someone who would have difficulty in making a claim, such as someone in poor health
Others who have an official status such as a guardian or someone appointed by the courts, can also claim.
If you are thinking of claiming tax back for someone else please phone the tax office (see below) for details about what to do next.
Tax Office Contact details:
HMRC
Lothians Area
Saughton House, Bromhouse Drive
Edinburgh EH11 3XG
Payroll Tax Ref: TS02 475/WB19408
Tax Documents & Where to send Them
** It is important we receive your completed tax forms quickly to you don't get put on emergency tax - which will over tax you. **
Relevant tax forms: P45 or New Starter Check List
Is this your first job?
Please provide this to the payroll department as .
YES
You will need to complete a New Starter Checklist available from here
It is important the New Starter Checklist is completed before your first pay day so that we know what tax code to use.
NO
If you have worked prior to this job in the current tax year your previous employer should of issued you a P45.
The P45 this will give details of your earnings, the tax you have previously paid and your current tax code.
If your previous employer did not issue you a P45 you can still complete a P46 (see above).
Where do I send my tax documents?
Please email your P45 or New Starter Checklist to customer.services@kingstalentbank.com
Will I received a P60?
You will only receive a P60 if you are currently working at the turn of the tax year. if you have worked at the turn of the tax year please email [email protected] and request for them to email you your P60.
If your leave date is prior to this date ( April 5th ) you will receive a P45.
National insurance is separate from income tax
While your income tax rate is important, it's not the only thing to affect your take-home pay.
In addition to plain old income tax, most UK workers also have national insurance contributions deducted from their pay. These kick in based on your earnings from the age of 16, and you usually stop paying when you reach state pension age.
What's changing in 2022/23?
From 6 April 2022, Class 1 and Class 4 national insurance contributions are set to increase by 1.25 percentage points for anyone earning above the primary threshold of £9,880. This is effectively a tax rise.
The table below shows the national insurance rates for the 2022/23 tax year.
What's my 2022/23 national insurance rate?
| EARNINGS | NATIONAL INSURANCE RATE (FOR EMPLOYED, NOT SELF-EMPLOYED) | |
|---|---|---|
| Per week | Annual salary | |
| Under £242 | Under £12,570 | No national insurance payable. |
| £242 and £967 | £12,570 to £50,270 | 13.25% on everything earned between £190 and £967 a week |
| Over £967 | Over £50,270 | 13.25% on everything earned between £242 and £967 a week, 3.25% on everything above that |
Some advanced national insurance rules are complicated. See the HM Revenue & Customs website for full rates.
| ||
However, as the primary threshold increased to £12,570 from 6 July 2022, the effects of this tax rise will be mitigated for many. As the table below shows, this change means anyone earning less than £34,300 will pay less national insurance in 2022/23.
Will I pay more NI in 2022/23?
| ANNUAL SALARY | CHANGE IN YOUR NATIONAL INSURANCE IN 2022/23 COMPARED TO 2021/22 |
|---|---|
| £15,000 | -£241 |
| £20,000 | -£178 |
| £30,000 | -£53 |
| £34,300 | £0 |
| £50,000 | +£197 |
| £75,000 | +£509 |
| £100,000 | +£822 |
These calculations take into account the July 2022 rise in the primary threshold, from £9,880 to £12,570. If you earn less than this threshold, no national insurance is payable.
If you're employed, the higher rate of Class 1 national insurance will be collected through your usual payslip. If you're self-employed, Class 4 national insurance contributions will automatically be calculated at the increased rate when you file your self-assessment tax return for 2022/23.
From April 2023, you'll see the additional 1.25 percentage-point health-and-social-care levy as a separate line on your payslip.
If you're above state pension age you won't be affected by the increase for the 2022/23 tax year but you will have to pay it from April 2023.
Student Loan
How much you repay depends on which plan you’re on.
Each plan has a threshold for your weekly or monthly income. You repay:
- 9% of the amount you earn over the threshold for plans 1, 2 and 4
- 6% of the amount you earn over the threshold for the Postgraduate Loan
You do not pay anything back if your income is under the threshold.
Interest starts being added to your loan from when you get your first payment.
Plan 1
The thresholds are £388 a week or £1,682 a month (before tax and other deductions).
Example
You’re paid monthly and your income changes each month. This month your income was £2,000, which is over the Plan 1 monthly threshold of £1,682.
Your income was £318 over the threshold (£2,000 minus £1,682). You will pay back £28 (9% of £318) this month.
Example
Your annual income is £27,000 and you’re paid a regular monthly wage. This means that each month your income is £2,250 (£27,000 divided by 12). This is over the Plan 1 monthly threshold of £1,682.
Your income is £568 over the threshold (£2,250 minus £1,682). You will pay back £51 (9% of £568) each month.
Interest on Plan 1
You currently pay interest of 1.5% on Plan 1. You can find out how the interest is calculated and interest rates for previous years.
Plan 2
The thresholds are £524 a week or £2,274 a month (before tax and other deductions). They change on 6 April every year.
Example
You’re paid weekly and your income changes each week. This week your income was £600, which is over the Plan 2 weekly threshold of £524.
Your income was £76 over the threshold (£600 minus £524). You will pay back £6 (9% of £76) this week.
Example
Your annual income is £28,800 and you are paid a regular monthly wage. This means that each month your income is £2,400 (£28,800 divided by 12). This is over the Plan 2 monthly threshold of £2,274.
Your income is £126 over the threshold (£2,400 minus £2,274). You will pay back £11 (9% of £126) each month.
Interest on Plan 2
While you’re studying, interest is 4.5%.
This is made up of the Retail Price Index (RPI) plus up to 3%.
This rate applies until the 5 April after you finish or leave your course, or for the first 4 years of your course if you’re studying part-time, unless the RPI changes.
After that, your interest rate depends on your income in the current tax year.
If you’re an employee, your income is your taxable pay:
- plus any pension contributions
- minus any benefits you get from your employer that are taxed through payroll (ask your employer if you’re not sure)
If you pay tax using a Self-Assessment tax return, your income is the total income amount on your Self-Assessment form. You’ll usually pay tax using a Self-Assessment tax return if you’re self-employed.
If you have more than one job in a year, your interest rate will be based on your combined income from all your jobs.
| Your annual income | Interest rate |
|---|---|
| £27,295 or less | RPI (currently 1.5%) |
| £27,296 to £49,130 | RPI (currently 1.5%), plus up to 3% |
| Over £49,130 | Usually RPI (currently 1.5%), plus 3% |
You must keep your contact details up to date in your online account and give the Student Loans Company (SLC) evidence if they ask for it. If you do not, you may be charged the higher interest rate even if your income is lower.
You can find out how the interest is calculated and interest rates for previous years.
If you have Plan 1 and Plan 2 loans
You pay back 9% of your income over the Plan 1 threshold (£388 a week or £1,682 a month).
If your income is under the Plan 2 threshold (£524 a week or £2,274 a month), your repayments only go towards your Plan 1 loan.
If your income is over the Plan 2 threshold, your repayments go towards both your loans.
Plan 4
The thresholds are £487 a week or £2,114 a month (before tax and other deductions).
Example
You’re paid monthly and your income changes each month. This month your income was £2,250, which is over the Plan 4 monthly threshold of £2,114.
Your income was £136 over the threshold (£2,250 minus £2,114). You will pay back £12 (9% of £136) this month.
Example
Your annual income is £33,000 and you’re paid a regular monthly wage. This means that each month your income is £2,750 (£33,000 divided by 12). This is over the Plan 4 monthly threshold of £2,114.
Your income is £636 over the threshold (£2,750 minus £2,114). You will pay back £57 (9% of £636) each month.
Interest on Plan 4
You currently pay interest of 1.5% on Plan 4. You can find out how the interest is calculated and interest rates for previous years.
If you have a Plan 4 loan and a Plan 1 loan
You pay back 9% of your income over the Plan 1 threshold (£388 a week or £1,682 a month).
If your income is under the Plan 4 threshold (£487 a week or £2,114 a month), your repayments only go towards your Plan 1 loan.
If your income is over the Plan 4 threshold, your repayments go towards both your loans.
Example
You have a Plan 4 loan and a Plan 1 loan.
Your annual income is £28,800 and you are paid a regular monthly wage. This means that each month your income is £2,400 (£28,800 divided by 12). This is over the Plan 4 monthly threshold of £2,114 and the Plan 1 threshold of £1,682.
Your income is £718 over the Plan 1 threshold (£2,400 minus £1,682) which is the lowest of both plans.
You will pay back £64 (9% of £718) and repayments will go towards both plans.
If you have a Plan 4 loan and a Plan 2 loan
You pay back 9% of your income over the Plan 4 threshold (£487 a week or £2,114 a month).
If your income is under the Plan 2 threshold (£524 a week or £2,274 a month), your repayments only go towards your Plan 4 loan.
If your income is over the Plan 2 threshold, your repayments go towards both your loans.
Example
You have a Plan 4 loan and a Plan 2 loan.
Your annual income is £28,800 and you are paid a regular monthly wage. This means that each month your income is £2,400 (£28,800 divided by 12). This is over the Plan 4 monthly threshold of £2,114 and the Plan 2 threshold of £2,274.
Your income is £286 over the Plan 4 threshold (£2,400 minus £2,114) which is the lowest of both plans.
You will pay back £25 (9% of £286) and repayments will go towards both plans.
Postgraduate Loan
The thresholds are £403 a week or £1,750 a month (before tax and other deductions).
Example
You’re paid weekly and your income changes each week. This week your income was £600, which is over the Postgraduate Loan weekly threshold of £403.
Your income was £197 over the threshold (£600 minus £403). You will pay back £11 (6% of £197) this week.
Example
Your annual income is £28,800 and you are paid a regular monthly wage. This means that each month your income is £2,400 (£28,800 divided by 12). This is over the Postgraduate Loan monthly threshold of £1,750.
Your income is £650 over the threshold (£2,400 minus £1,750). You will pay back £39 (6% of £650) each month.
Interest on Postgraduate Loan
You currently pay interest of 4.5% on Postgraduate Loans.
The interest is usually the Retail Price Index (RPI) plus 3%.
You can find out how the interest is calculated and interest rates for previous years.
If you have a Postgraduate Loan and a Plan 1, Plan 2 or Plan 4 loan
You pay back 6% of your income over the Postgraduate Loan threshold (£403 a week or £1,750 a month). In addition, you’ll pay back 9% of your income over the Plan 1, Plan 2 or Plan 4 threshold.
Example
You have a Postgraduate Loan and a Plan 2 loan.
Your annual income is £28,800 and you are paid a regular monthly wage. This means that each month your income is £2,400 (£28,800 divided by 12). This is over the Postgraduate Loan monthly threshold of £1,750 and the Plan 2 threshold of £2,274.
Your income is £650 over the Postgraduate Loan threshold (£2,400 minus £1,750) and £126 over the Plan 2 threshold (£2,400 minus £2,274).
You will pay back £39 (6% of £650) to your Postgraduate Loan and £11 (9% of £126) to your Plan 2 loan. So your total monthly repayment will be £50.
Example
You have a Postgraduate Loan and a Plan 1 loan.
Your annual income is £28,800 and you are paid a regular monthly wage. This means that each month your income is £2,400 (£28,800 divided by 12). This is over the Postgraduate Loan monthly threshold of £1,750 and the Plan 1 threshold of £1,682.
Your income is £650 over the Postgraduate Loan threshold (£2,400 minus £1,750) and £718 over the Plan 1 threshold (£2,400 minus £1,682).
You will pay back £39 (6% of £650) to your Postgraduate Loan and £64 (9% of £718) to your Plan 1 loan. So your total monthly repayment will be £103.
If your income changes during the year
You can ask for a refund if you make repayments but your total annual income (from 6 April to 5 April the following year) is less than:
- £20,195 a year for Plan 1
- £27,295 a year for Plan 2
- £25,375 a year for Plan 4
- £21,000 for Postgraduate Loans
If you have 2 or more jobs
If you’re employed, your repayments will be taken out of your salary. The repayments will be from the jobs where you earn over the minimum amount, not your combined income.
Example
You have a Plan 1 loan.
You have 2 jobs, both paying you a regular monthly wage. Before tax and other deductions, you earn £1,000 a month from one job and £800 a month for the other.
You will not have to make repayments because neither salary is above the £1,682 a month threshold.
Example
You have a Plan 2 loan.
You have 2 jobs, both paying you a regular monthly wage. Before tax and other deductions, you earn £2,300 a month from one job and £500 a month for the other.
You will only make repayments on the income from the job that pays you £2,300 a month because it’s above the £2,274 threshold.