How much tax do I pay when I gain a job?

“If you’re starting your first job

If you’re a student and you’ve done some part-time work this tax year, you may have a form P45 from your previous employer. This gives details of your earnings and the tax you’ve paid. A tax year runs from 6 April to the following 5 April. If you haven’t got a P45, your new employer will ask you to fill in a form P46. It’s important you complete this before your first pay day so your employer knows what tax code to use. They’ll send the P46 to HM Revenue & Customs (HMRC) so that they can set up a record for you and review your tax code. Your employer uses your tax code to work out how much tax to take off your wages through the PAYE (Pay As You Earn) system. What tax you’ll pay There are two main rates of Income Tax: 20 per cent on income up to £37,400 (basic rate)

40 per cent on income of £37,401 or more (higher rate)

However, nearly everyone who lives in the UK gets a tax-free personal allowance. This is the amount of income you can receive, spread equally over the year, without having to pay tax on it.”<br /><br /> Source: www.direct.gov.uk

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