This weeks question comes from one of our readers Paul, who has asked how much tax will I pay on earnings of £200 a week.
In the UK, the first £11,850 (2018/2019) or £12,500 (2019/2020) of income is free of income tax. In this example, £200 per week or £10,400 per year is below this level and thus no income tax will be paid.
What you will pay is National Insurance contributions that will allow you to qualify for certain benefits and a State Pension (Full State Pension requires 35 Years, while a basic state pension requires 10 years of contributions).
If you're an employee earning less than £166 a week or are self-employed earning less than £6,365 a year, you don't need to pay national insurance, however above this figure, you will depending on your class.
As an employee, if you earn between £166 and £962 a week, you'll pay 12% National Insurance contributions. If you earn over £962 a week, you pay an additional 2% on this amount.
The Tax Table
As shown below, Paul earns £200 per week or £10,400 per year. This is below the £11,850 limit for the 2018/2019 tax year and as a result, Paul pays no income tax.
Paul will pay National insurance at 12% of his income over the first £166 per week. As consequence, he pays £19.75 per month in NO contributions.
| Year | Month | Week |
|---|---|---|---|
Gross Wage | £10,400 | £867 | £200 |
Taxable Wage | £0 | £0 | £0 |
Tax Paid | £0 | £0 | £0 |
Tax Free Allowance | £11,850 | £988 | £228 |
National Insurance | £237 | £19.75 | £4.50 |
Take-Home Pay | £10,163 | £847 | £195.50 |
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