# Average UK salary - a guide



## starchief (Dec 4, 2009)

I thought this might be useful as a guide to what people earn in the UK. I see some crazy figures being banded about sometimes, telling you that £45000 can be considered poor (when it's £20k more than most people get), so here's the official figures on what people earn in the UK. Obviously, some professions earn more than others, other places are more expensive than others etc etc but here's the basic facts based on the last year or two:

Part-Time (PT) workers drag the figures down considerably, so I'll concentrate just on Full-Time (FT) wages.

_Mean average_ for FT workers = *£31,323* but that figure is artificially raised by ultra-high earners (high-flying bankers, football players etc). So, the _median average_ wage is *£25,123*. So 50% of FT workers earn below that.

*£31,759* would get you into the _top 25%_ of FT earners and *£44,881* is enough to get you into the _top 10%_. Earn *£118,027* and you're in the _top 1%_, with only _0.6%_ of people in the *£150,000* where tax is 50%.

And, of course, 40% is only on earnings over £37,400, not on the whole salary (it might be obvious to you but I know some that don't realise that). Similarly the 50% tax on over £150k.


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## Joppa (Sep 7, 2009)

starchief said:


> And, of course, 40% is only on earnings over £37,400, not on the whole salary (it might be obvious to you but I know some that don't realise that). Similarly the 50% tax on over £150k.


Except that if you earn over £100,000, your personal allowance of £6475 is eroded by £1 for every £2 you earn, so it disappears altogether at £112,950. So you are taxed at 20% on the first £37,400 and 40% above that, which means you are effectively taxed at 60% from £100,000 to £112,950.
Budget 2009 | Deloitte | Personal allowances - withdrawal for those earning 100k or more
The coalition government has further announced measures to increase taxes and cut allowances esp for medium to high earners.


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## steveg63 (Sep 5, 2010)

If your earning £150k+ and paying 60% tax you need an new accountant!

Steve


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## jdripper (Nov 13, 2010)

Is your personal allowance deducted first and the amount over £37,400 taxed at 40% ?

So if you earn 50k the amount taxed at 40% is (50,000 - 37,400 - 6,475) ?


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## steveg63 (Sep 5, 2010)

Your personal allowance comes off first, then u pay the base rate of tax to the 1st limit then the higher rate of amounts over this limit.


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## Joppa (Sep 7, 2009)

jdripper said:


> Is your personal allowance deducted first and the amount over £37,400 taxed at 40% ?
> 
> So if you earn 50k the amount taxed at 40% is (50,000 - 37,400 - 6,475) ?


Yes, though it's better to think of deducting your personal allowance of £6475 first from your gross pay of £50000, leaving £43525 as taxable. Of this the first £37400 is taxed at 20% and the rest at 40%, so you are taxed at 40% on £43525 - £37400 = £6125.
In another word, income tax is progressive, and you are only taxed at a higher rate on that portion of your income after deducting your personal allowance and the part taxed at the standard rate.
This is not the case for some other kinds of taxation, such as stamp duty on buying properties. While a property costing from £125,001 up to £250,000 is taxed at 1%, if the price exceeds by even £1, the *whole *of your property is taxed at the new rate of 3%, not just on the part exceeding £250,000.


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## Elphaba (Jan 24, 2008)

Joppa said:


> Yes, though it's better to think of deducting your personal allowance of £6475 first from your gross pay of £50000, leaving £43525 as taxable. Of this the first £37400 is taxed at 20% and the rest at 40%, so you are taxed at 40% on £43525 - £37400 = £6125.
> In another word, income tax is progressive, and you are only taxed at a higher rate on that portion of your income after deducting your personal allowance and the part taxed at the standard rate.
> This is not the case for some other kinds of taxation, such as stamp duty on buying properties. While a property costing from £125,001 up to £250,000 is taxed at 1%, if the price exceeds by even £1, the *whole *of your property is taxed at the new rate of 3%, not just on the part exceeding £250,000.


And on top of Income Tax there are the National Insurance deductions (on band earings - between £97 & £844 per week for tax year 2010/11) , which are really just tax by another name, payable at a rate of 11%.

-


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## Mix (Jul 18, 2010)

The easiest way to understand the total and marginal impacts of tax and NI can be to use one of the purpose-built calculators, such as UK PAYE Income Tax Calculator 2010 salary calculator UK. Updated for 2010 / 2011 tax year. Calculate wages pension national insurance and student loan repayments online. (other tax calculators are available).


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## jdripper (Nov 13, 2010)

Slightly off topic, but I had many of my Brit expat friends in France say how much less taxes you pay in the UK.
From what I see now this is not true at all. Well, it might be true if your salary is in the £90k range, but for those of us in the £35/£55k range it's not the case.


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## zeeb0 (Oct 29, 2010)

OH and also concider the hact that if one paretn earns over 45k then childbenefit is cut... nice!


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## diamantelady (Jan 31, 2010)

zeeb0 said:


> OH and also concider the hact that if one paretn earns over 45k then childbenefit is cut... nice!


If only 1 parent is earning over 45k ,( & the other parent stays home), why would getting child benefit removed even matter its only just over ,100 pounds or so a month  ( i have 2 children so its slightly more)


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## Joppa (Sep 7, 2009)

diamantelady said:


> If only 1 parent is earning over 45k ,( & the other parent stays home), why would getting child benefit removed even matter its only just over ,100 pounds or so a month  ( i have 2 children so its slightly more)


The changes will come into effect in January 2013. If one of the parents is earning over £37400 + £6475 = £43875 and thus liable to higher income tax rate of 40%, Child Benefit will be withdrawn. But if neither parent pays 40% tax, then they will still receive Child Benefit, even if each earns up to £43875.


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## diamantelady (Jan 31, 2010)

Joppa said:


> The changes will come into effect in January 2013. If one of the parents is earning over £37400 + £6475 = £43875 and thus liable to higher income tax rate of 40%, Child Benefit will be withdrawn. But if neither parent pays 40% tax, then they will still receive Child Benefit, even if each earns up to £43875.


Thanks for clarifing the details ,but i ment if only 1 parent was earning 45k ,what diffrence would it make ,being deprived of a paultry 100ish a month


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## Joppa (Sep 7, 2009)

diamantelady said:


> Thanks for clarifing the details ,but i ment if only 1 parent was earning 45k ,what diffrence would it make ,being deprived of a paultry 100ish a month


You will make an excellent spokesperson for the LibDem/Conservative coalition government!


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## diamantelady (Jan 31, 2010)

Joppa said:


> You will make an excellent spokesperson for the LibDem/Conservative coalition government!


I am 49 i have never voted in my life ,as i think it dont matter who is in power ,the rich get richer the poor poorer .The point I was trying to make was this, if you are lucky enough to be earning 45k ,with just 1 wage ,what diffrence would child benefit make to you? I dont think, that high earners really need the child benefit for their kids?. Would you rather make savings in other areas like maybe the old or the sick, you know some familys, just keep on growing due to all the benefits they get ,especially if they are unemployed ,as its free rent in your council house, free council tax, free meals at school, free bus pass to get to school,uniform vouchers,and on top of that child benefit, works out better than working !especially if you have lots of kids ,(BTW ive got 4 kids 2 working 2 at school I work 2 jobs & own my own ex council house so im not talking out of turn)


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## Zultan (Aug 4, 2009)

A hundred pounds a month might not make a difference.. But on a 45K salary the take home pay is around £2800 a month. If you have two kids the child benefit works out at around £160 a month (the same as 5.7% paycut or £1920 per year). Couple this with the removal of tax relief on child care and it adds up to a 10% pay cut. Apart from politicians and boy bands, who wouldn't notice a 10% cut in salary? Add that to all the other hikes and austerity measures, anyone who is living to their means is hurting.


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## diamantelady (Jan 31, 2010)

Zultan said:


> A hundred pounds a month might not make a difference.. But on a 45K salary the take home pay is around £2800 a month. If you have two kids the child benefit works out at around £160 a month (the same as 5.7% paycut or £1920 per year). Couple this with the removal of tax relief on child care and it adds up to a 10% pay cut. Apart from politicians and boy bands, who wouldn't notice a 10% cut in salary? Add that to all the other hikes and austerity measures, anyone who is living to their means is hurting.


I understand what you are saying, I just dont understand what the numbers/figures are?
Our yearly income is 9k a year ,I work 2 jobs & that includes child benefit,tax credits & family tax credits too, we dont live above our means, as we only have 800approx a month to pay all our bills, so you can understand why ,I think that the upper earning lot ,really dont need child benefit for supporting their children growing up


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## Zultan (Aug 4, 2009)

Yeah, I'm not sure why the forum messed the formatting of the numbers up.. I think my issue is that by suddenly ending a benefit, means it will impact people. 45K is a good salary, don't get me wrong - but it wouldn't make you rich.. I have a friend on 90K with 5 kids (I don't feel sorry for him!) he's also currently paying nearly 3k a month in tax and national insurance - I'm sure his family will miss the 4k a year they get in child benefit.


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## diamantelady (Jan 31, 2010)

Zultan said:


> Yeah, I'm not sure why the forum messed the formatting of the numbers up.. I think my issue is that by suddenly ending a benefit, means it will impact people. 45K is a good salary, don't get me wrong - but it wouldn't make you rich.. I have a friend on 90K with 5 kids (I don't feel sorry for him!) he's also currently paying nearly 3k a month in tax and national insurance - I'm sure his family will miss the 4k a year they get in child benefit.


Oh if only I earned that sort of money id be rich!!!, but i suppose realitively speaking ,at that kind of money your lifestyle would be very expensive ,and having 5 kids all at home, you would miss the benefit. Just think your friends deductions for 3 months, equals my yearly income,frightening aint it, I still think tho that the upper earning lot, which includes popstars,actors, wags,etc really dont need the cash, it should be means tested, then it would be given to familys that do need it


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## 90199 (Mar 21, 2010)

I worked in the U.K. for fifty years, my first salary was one pound per week before deductions!

My last salary in employment was 30k per annum, believe me the sum of 40k for most people is unattainable, minimum wage is common place that is if you can get employment at all.

For the last few years I was self employed I charged up to 9 pounds per hour for garden maintenance, my clients would or could not pay more,

Hepa


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## diamantelady (Jan 31, 2010)

Hepa said:


> I worked in the U.K. for fifty years, my first salary was one pound per week before deductions!
> 
> My last salary in employment was 30k per annum, believe me the sum of 40k for most people is unattainable, minimum wage is common place that is if you can get employment at all.
> 
> ...


Well said ,as thats a more realistic idea of what working in the U.K is about, that is if you are lucky enough to be employed


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