How can I calculate the income tax payable by a single man earning £950 per month? |
We recommend you use the following procedure:
It is important to work out income tax based on annual income.
In your case, this is
12 × £950 = £11400
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| Every tax payer has this allowance | One of the married couple (usually the husband) receives this additional allowance |
In your example, the man is single so the allowance is £3765. Therefore the taxable income is
£11400 - £4335 = £7065
| Paid on the first £4300 of taxable income |
| 20p is short for 20p in the pound, equivalent to 20% |
In your example, the taxable income is more than £4300, so the tax paid is:
20% of £4300 = £860
| Paid on taxable income between £4300 and £27100 |
| 24p is short for 24p in the pound, equivalent to 24% |
The first £4300 of taxable income has been taxed (at the lowest rate).
The remaining part of the taxable income is:
£7065 - £4300 = £2765
All of this is charged at the basic rate:
24% of £2765 = £663.60
| Paid on taxable income above £27100 |
| 40p is short for 40p in the pound, equivalent to 40% |
The man in your example does not have a taxable income above £27100, so no tax is paid at the highest rate.
Your man pays a total annual tax of
£860 + £663.60 = £1523.60
We will update this page to keep you informed of any changes in the taxation system.
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