Income Tax And National Insurance Flashcards
(7 cards)
1
Q
What is income tax?
A
The charge on personal income paid to the government
2
Q
What is your personal allowance?
A
The amount of tax free income you are allowed each year.
£12,570/PA
3
Q
What is gross pay?
A
The total amount you earn before any deductions
4
Q
What is net pay?
A
The total amount of money you take home after all deductions have been made.
5
Q
What are the tax bands?
A
20% up to £37,700
40% from £37,700 - £125,140
45% above £125,140
6
Q
What is National insurance?
A
- 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
7
Q
What are the tax bands for NI?
A
0% up until £12,570
12% from £12,570 to £50,270
2% above £50,270
