Taxing work
Question
I work full-time and have been considering a part-time job, but I need to know how much I will be taxed, so I can decide if its worth making the change?
Answer
Income Tax and National Insurance (NI) are the two kinds of tax that are taken from your income by your employer before you get your pay packet.
For the 2009-10 tax year you have a personal allowance of £6,475, but above that figure income tax is currently charged at two rates:
- Any income up to £37,400 will be taxed at 20%;
- Any income over £37,400 will be taxed at 40%.
The amount of income tax you pay is based on your total income, so your personal allowance won't be applied to your second job. Therefore you'll be taxed at 20%, unless your combined earnings total more than £37,400. In that case any income above that figure will be taxed at 40%.
National Insurance can be quite complicated, as it is charged at various different rates depending on your circumstances.
There are salary calculators available online which can help you to figure out exactly how much tax you'll be paying on your wage. Hopefully this can help you decide if it will be possible to move to a part-time job.
You could also contact your local Citizens Advice Bureau for further help and advice.
Updated: 13/04/2010
Question answered by CAB
