UK Paycheck - How Much Will I Keep?

I guess this is really more that just a tax question.  For the sake of round numbers, let's assume someone makes £4,000 a month.  In the States one would pay federal tax, social security, state tax, county tax, etc.  I'm trying to budget how much I'll have for rent and was hoping someone could just provide a rough estimate what types of taxes and other deductions would be applicable in the UK, specifically London (e.g., city tax?). 

Any help is appreciated.  Thanks!

Hi

I'm no expert but...

I would estimate a take home pay of something in the region of £2,900.  Tax would be in the region of 20% and National Insurance contributions somewhere in the region of 8%.  This assumes that it's a straightforward situation, doesn't include pensions or some weird and wonderful tax code.

There's a few websites you could search around for, maybe google something like Tax Calculator.

this is the calculator I always use: http://listentotaxman.com/

If your annual salary was £48,000- take home pay would be about £2857/monthly

You will also have to pay council tax but that totally depends on where you live and what kind of property you live in.

Thanks everyone for your reply's.  This was very helpful!

What you're thinking of in regards to 'city tax' isn't something taken out of your paycheck in the UK.  As Britwife mentioned, you will pay council tax to your local council.  So if you lived in Westminster, you'd pay a monthly amount to Westminster Council as a direct debit which is based on what value band your property is in.  If I had to make a wild guess you'd probably pay somewhere between £1100-1500/year in 10 monthly installments, for example.

Your pay will only deduct UK income tax and National Insurance.  You're probably looking at between 28-32% as you'd be in the highest tax band.  This would vary depending on what eligible pre-tax deductions are taken out.

Hope that helps.

If on a work permit there aren't really any possible deductions. It has to be PAYE.

Vicky

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4015566

http://www.thesalarycalculator.co.uk/salary.php

pretty good site

MY Hubby's a Chartered Acct. We just discussed it this weekend about taxes you realize and  don't realise. Seems like  a person only has 1/3 of what they earn to themselves, the rest is on taxes...boo.

http://www.thesalarycalculator.co.uk/salary.php

pretty good site

MY Hubby's a Chartered Acct. We just discussed it this weekend about taxes you realize and  don't realise. Seems like  a person only has 1/3 of what they earn to themselves, the rest is on taxes...boo.

Do you mean just taxes taken out of the pay cheque, or other things you have to pay for afterwards too? Because according to the Salary Calculator you linked to, I will be taking home 5/6 of what I will be earning when I go back to work in the UK in a few weeks - that's definitely more than 1/3  .

I've always been under the impression that unless your salary is within the highest tax bracket, you lose approximately 1/5 of your wages to taxes and so you take home 4/5.

Do you mean just taxes taken out of the pay cheque, or other things you have to pay for afterwards too? Because according to the Salary Calculator you linked to, I will be taking home 5/6 of what I will be earning when I go back to work in the UK in a few weeks - that's definitely more than 1/3  .

I've always been under the impression that unless your salary is within the highest tax bracket, you lose approximately 1/5 of your wages to taxes and so you take home 4/5.

Yeh, I just did my salary and that salary calculator is spot on and I take home 4/5 of my monthly income.

He said it's taxes you don't realise. You have the ones they take out automatically, but then other ones you know about like council, tv tax, etc, then ones you don't think of every day. lol I'm not the accountant; I'll ask him in an email to explain for more clarity lol.

He said it's taxes you don't realise. You have the ones they take out automatically, but then other ones you know about like council, tv tax, etc, then ones you don't think of every day. lol I'm not the accountant; I'll ask him in an email to explain for more clarity lol.

Ah, okay - that makes more sense... thanks for clarifying .

The was an interesting article in the Economist must be 4 or 5 years ago that compared total tax burden in the US and UK.  They basically totted up all the tax that an "average" person might pay and worked it out as a percentage of the average income. Like Steph said it included things like VAT/Sales tax, Council/Property tax etc.

As you might expect the UK tax burden was higher but, contrary to a lot of stereotypes, not by much - I think there was 2 or 3 percent in it.

Of course there are always issues when dealing with averages especially with American taxes as so many are determined at state level - I think the article mentioned that the figures were skewed by places like California that have a large population and a relatively high tax burden.

LOL he didn't know it was for a message board but this is what he wrote:

Say if someone earns £3,000 a month. But Tax is about £750 on that. Then out of that remaining £2,100 one would pay council tax and then everything  else one would buy everyday (food, petrol, games, things from store) is all charged with VAT etc. So say I bought our TV for £1,000 in living room, that was actually only about £800. But £200 was VAT. So just by buying that, £200 more of my pay check went to tax!