Following the update of The Salary Calculator to April 2012 tax rates, I thought it might be interesting to see how the proportion of your salary eaten up by income tax and National Insurance changes as you earn more money. If you earn less than £8,105 you pay no tax and less than £7,605 you pay no National Insurance. But those earning more than £150,000 per year will be losing nearly half their income to the tax man. I created the following chart showing how your take-home pay increases as your salary increases from £0 to £200,000:

Chart showing the proportion of UK salaries taken by tax and national insurance

Click the image for a larger, interactive version

Take home is in blue – the red section on top is the tax you pay, and the yellow section on top of that is National Insurance. For those of you paying off your student loan, here is a version with those deductions on top, in green:

Chart showing proportions of UK salary taken by income tax, national insurance and student loan

Click the image for a larger, interactive version

So you can see that as your salary goes up, your take-home pay (the blue line) always increases… but the higher your salary is, the slower your take-home pay increases with each pay rise, as more of it is going to the government.

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Income Tax, National Insurance, Student Loan

None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

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