National Insurance contributions are made up of three bands. It is a deductible and computed as a sum of the contributions for every band the gross salary is applicable for. Further examples on how it is computed for various salaries can be found in the Examples: National Insurance contributions and Tax calculations table towards the lower power of this page. Below are the definitions of the bands for the UK:
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Band | NI deductible income | NI Rate
---------------------+-------------------------+--------
No contributions | Up to £8,060.00 | 0%
Basic contributions | £8,060.00 to £43,000.00 | 12%
Higher contributions | over £43,000.00 | 2%
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Note: for each of the above bands, NI deductible income is accounted for, starting from and including the first penny (1p) earned above the lower-limit, up to and including the higher-limit specified.
Tax payable is made up of four bands. It is a deductible and computed as a sum of the tax payable for every band the gross salary is applicable for. Further examples on how it is computed for various salaries can be found in the Examples: National Insurance contributions and Tax calculations table towards the lower power of this page. Below are the definitions of the bands for the UK:
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Band | Taxable income | Tax rate
---------------------+---------------------------+---------
Personal Allowance* | Up to £11,000.00 | 0%
Basic rate | £11,000.00 to £43,000.00 | 20%
Higher rate | £43,000.00 to £150,000.00 | 40%
Additional rate | over £150,000.00 | 45%
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*past an Annual Gross Salary of £100,000.00, the personal allowance rules change i.e. for every extra £2 earned, the personal allowance reduces by £1. Past an annual gross salary of £122,000.00, NO personal allowance is applicable. And this excess is taxed at the Higher rate tax.
Note: for each of the above bands, taxable income is accounted for, starting from and including the first penny (1p) earned above the lower-limit, up to and including the higher-limit specified.
National Insurance contributions = sum of the contributions accumulated by the two contribution bands
Tax payable = sum of all the tax payable accumulated by the three tax bands
Total deductibles = National Insurance contributions + Tax payable
See the Examples: National Insurance contributions and Tax calculations section for examples of the above mentioned National Insurance and Tax calculations.
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