How much do you have to earn to pay 68% tax?

[FunnysInLaJardin]

Not in the UK, so out of touch, but you must have to earn a shed load to pay that much tax?

TAAT are not allowed

£50k www.taxpolicy.org.uk/2022/10/04/marginal/

this isn't a TAAT, thread police!

thanks, that's a bit shit isn't it!

Non savings income (usually salary) between £100k and £125,140 is subject to a notional rate of 60% because you lose the personal allowance but it’s not an actual rate.

Over £150,000 is 45% (or 39.35% on dividend income).

The 68% must be including National Insurance contributions, but it’s not quite right because you pay 12% on earnings up to £50,270 and then 2% thereafter.

It's also wrong, but let's not let the facts get in the way of a good thread, eh?

Maybe it includes student loans?

There are some salaries where the marginal rate is pretty high so it might seem like not worth the salary increase.

I don't quite understand what happens above £100k, but if you go from £50k to £60k (after pension contributions), you'd lose 40% tax, 2% NI, 9% student loan if you have one, plus all your CB, which is about £1800 per year for 2 DC so equivalent to 18% tax, so a total of 69% marginal rate, so that might be it as I'm not sure exactly what the CB amount is.

Makes you think twice about making that salary jump, especially if you also face extra commuting or childcare costs, or more stress/inconvenience/travel, as the extra salary you'll see will be relatively small so you might decide it's not worth it.

@BarbaraofSeville

do you know the answer to this, I'm currently in the 50 to 60k marginal band, when do you start coming out of that? Once you earn £1 over 60k or (to remove the CB loss) 65k or higher? 68k?

I'm about to attempt a pay negotiation and would like to extract myself from my current position! Top end of above scale.

I hadn't realised a previous pay rise had effectively made me worse off, and I was considering increasing my pension to bring me out of it, but think it'll reduce my take home by too much.