income taxation querstion.

[2uk]

I am trying to figure out PAYE taxes on 42 K salary.



PAYE (on £42,000, Tax code 522L, Fiscal Year 2007/2008)



Starting rate 10%
0 to £2,230
Tax > £223

Basic rate 22%
£2,230 to £34,600
£7,121

Higher rate 40%
£34,600 - to ~
£868

How exactly £868 is 40 percent on the sum between £34600 and £42000 ???


Total Tax: £8,212

[Sockpuppet]

Tax free allowance you have not taken into account. The actual amount taxed is 42000 - 5225

[Gonzo]

I am trying to figure out PAYE taxes on 42 K salary.



PAYE (on £42,000, Tax code 522L, Fiscal Year 2007/2008)



Starting rate 10%
0 to £2,230
Tax > £223

Basic rate 22%
£2,230 to £34,600
£7,121

Higher rate 40%
£34,600 - to ~
£868

How exactly £868 is 40 percent on the sum between £34600 and £42000 ???


Total Tax: £8,212






According to:

http://calculator.contractoruk.com/

The tax code of 522L means that there is no tax to pay on the first £5220.

So £868 is the higher rate tax on the range between £39820 to £42000 which I think you will find will be spot on.