Income Tax And National Insurance Flashcards
(7 cards)
What is income tax?
The charge on personal income paid to the government
What is your personal allowance?
The amount of tax free income you are allowed each year.
£12,570/PA
What is gross pay?
The total amount you earn before any deductions
What is net pay?
The total amount of money you take home after all deductions have been made.
What are the tax bands?
20% up to £37,700
40% from £37,700 - £125,140
45% above £125,140
What is National insurance?
- National insurance is a tax taken from your earnings that help to build your entitlement to certain benefits eg. State pension.
- you begin to pay NI from 16 and end at retirement age, even if you continue working
What are the tax bands for NI?
0% up until £12,570
12% from £12,570 to £50,270
2% above £50,270