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To be totally thick and not understand salaries...

(16 Posts)
StormcloakNord Sat 11-Aug-18 14:30:21

Sort of.

My DP and I were just chatting about a potential promotion he'll be going for in the next 2 years and it got me thinking about salaries and tax etc.

I think I'm being totally thick, and if someone could correct me that would be helpful 😂

Would someone at £44k a year (tax 21%, we're in Scotland) be in the same financial position as someone on £55k a year (41% tax) ??

I worked this out by taking 44k minus 11.5k and taking away 21% then adding the 11.5k back on, same with the 55k...

So because of the tax banding would the two salaries bring an equal amount home giving there are no unusual tax circumstances.

Thanks in advance if you made it this far through the waffle!

SerendipityFelix Sat 11-Aug-18 14:31:58

No, you pay the higher % tax on the amount you earn over the tax bracket, not on your entire salary.

TheNemesisOfLame Sat 11-Aug-18 14:32:59

There's a fab free website called The Salary Calculator. You can compare 2 salaries/hourly rates and all sorts.

LeroyJenkins Sat 11-Aug-18 14:33:03

Taxes in England work on bands

So 0 to 1200 no tax
1201 to 3500 taxed at 10%
3501 to 5000 taxed at 40%

(can't remember exact figures, so mine is example only)

Happinessisabook Sat 11-Aug-18 14:33:27

You only pay the higher rate tax on the earnings over the threshold.
So 0 on the first 11.5k
21% on the 22.5k (44k-11.5k)
Then 41% on 11k (55k-44k)

Parker231 Sat 11-Aug-18 14:33:57

www.thesalarycalculator.co.uk/salary.php

Southernc0mfortmirror Sat 11-Aug-18 14:34:43

The Listen to Taxman website can be helpful.
Tried to post a link but it didn’t work - should come up on google though

StormcloakNord Sat 11-Aug-18 14:35:47

Serendipity, that was why I took away 11.5k... I feel like I'm being ridiculously thick 😂

So 44k minus 11.5k (your tax free amount) would be 32500 minus 21% tax is £25675 plus your 11500 tax free amount is £31,175 take home.

Then same for 55k minus 11.5k is 43,500 minus 41% tax is 25,665 plus your 11.5k is £37,165 take home...

Help 😂

Zebrasinpyjamas Sat 11-Aug-18 14:36:34

Look for a net pay calculator on Google. These are websites that you type your salary into and it tells you how much you will get after tax (ie net).

As pp said, the tax rates don't apply to your whole salary but the amounts within a range.

StormcloakNord Sat 11-Aug-18 14:37:14

Ohhhhhh Lord.

Okay I get where I'm going wrong....

Feeling deservedly stupid 😂😂😂

mummmy2017 Sat 11-Aug-18 14:37:15

I checked..
44 = 33.3k
55= 39k.

Merryoldgoat Sat 11-Aug-18 14:39:05

It’s great when you ‘see’ it, isn’t it?

We all have blind spots.

StormcloakNord Sat 11-Aug-18 14:41:13

Thank you everyone, I went onto the site that gives you take home pay etc. Makes a lot more sense now 😂

arethereanyleftatall Sat 11-Aug-18 15:06:15

Goodness. An £11k increase in salary, only results in a £5.7k actual rise. Half.

tildaMa Sat 11-Aug-18 15:07:51

listentotaxman.com/ will show you exactly how much it will be.

mostdays Sat 11-Aug-18 15:09:48

A pp recommended Listen To Taxman and it's really good.

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