Taxes (comparative)

[nemaroller]

I'm curious about the taxes in the UK on a typical programmer's paycheck. I make $70k a year, so that's roughly 39,000 british pounds annually.

Since this a fairly anonymous forum and I really don't care about exposing my financial situation... I'd like to compare the typical taxes deducted on a paycheck.

I'm a C# programmer with 3 years of experience living in the Midwestern United States (and for all you US West coast programmers, yes we get paid significantly less, but our housing costs are significantly less). Here's my general layout (all in US dollars):

Gross income:
$ 5220 / month (2,922 British pounds)

Pre-tax group health payment:
$ 360 / month health insurance (no deductibles - only costs are $20 per doctor visit)
(201 British pounds)

[B] Federal (US Government income tax)
$374 / month (209 British pounds)

Social Security Tax (for government social security payments after 65)
$292 / month (163 British pounds)
Medicare Tax
$68 / month (38 British pounds)
State Income Tax (Wisconsin has state income taxes)
$282 / month (157 British pounds)

Net Pay Income: $3844 (or 2,152 British pounds) / month

So ideally, we need to get someone who make's rough 39,000 british pounds annual salary so we can compare on taxation.

[FunkyDexter]

I don't have a payslip in front of me but I'm on £28,000 and had just under £1700 this month after taxes were applied. So I lost roughly £7,600 in taxes and National Insurance, can't remember how it broke down between the two though.

[yrwyddfa]

A quick PAYE search (in the UK we Paye As We Earn) reveals that from £39k you would end up paying £10,657.52 tax (including National Insurance - which is the equivalent (sort of) of private health care in America)

I can't be bothered to work out the exchange rate right now.

[MasterBlaster]

Keep in mind that Owing property, Being married, having children and the number of children make a huge difference in what you will pay in taxes. I'm curious if this is the same in europe generally as well.

[FunkyDexter]

Keep in mind that Owing property, Being married, having children and the number of children make a huge difference in what you will pay in taxes. I'm curious if this is the same in europe generally as well

In the UK , being married and having children gives you a higher tax free allowance. I don't think owning property has any implication at all but I'm still stuck renting so I'm not sure.

[Valleysboy1978]

If you own a property we pay council tax based on its value (this goes towards local emergency services and such).

I'm not on £39k but I can work it out based on the percentage tax I pay a month...roughly.

£29,113.50 per year after PAYE tax (this does not include council tax)
This equates to £2,426 a month after tax which is roughly £4,100

Basically the only taxes we pay directly out of our wages are basic government tax and National Insurance (this pays for all our medical costs from local doctors to surgery). There are other minor deductions but these are not applicable to all persons, only the above two are applicable to ALL UK residents.

Hope that helps a bit

[FunkyDexter]

If you own a property we pay council tax based on its value

In England it's the occupier rather than the owner that's liable so you'll pay it even if you rent. Is that different in Wales? (I assume you have to be Welsh with a name like Valleysboy)

[nemaroller]

I'm married with two children, and own a home.

Generally, a small percent of local property taxes are deductible off your Federal income tax, however, the major deduction is from the interest paid on monthly mortgage payments.

My annual local property tax is $3200 (water, sewer, sanitation, police, fire, etc).

I'm surprised to learn that the occupier of a rental property in the UK is responsible for paying the property tax. In the US, that cost would typically be factored into the rent payment by the landlord.

[Valleysboy1978]

In England it's the occupier rather than the owner that's liable so you'll pay it even if you rent. Is that different in Wales? (I assume you have to be Welsh with a name like Valleysboy)

Nope you are right. Still getting used to having my own house. When I thought about it I remembered I pay less as I live alone

[yrwyddfa]

In the UK , being married and having children gives you a higher tax free allowance. I don't think owning property has any implication at all but I'm still stuck renting so I'm not sure.

You get tax credits which are based on your income. Your tax-code remains the same as if you were single, unless you were born before 1940 or something.

[MasterBlaster]

Generally, a small percent of local property taxes are deductible off your Federal income tax, however, the major deduction is from the interest paid on monthly mortgage payments.

remember to save every receipt for anything used to upgrade your house like tools and building materials as well. You can use some of that as a write off if you sell your place. I'm not sure how it applies if you hire contractors though. I imagaine it works the same way.

[MarkDorf]

A quick PAYE search (in the UK we Paye As We Earn) reveals that from £39k you would end up paying £10,657.52 tax (including National Insurance - which is the equivalent (sort of) of private health care in America)

I can't be bothered to work out the exchange rate right now.

Exchange rate notwithstanding, you're looking at about 27% of your pay. About the same as you pay here.

[cilu]

Exchange rate notwithstanding, you're looking at about 27% of your pay. About the same as you pay here.

Just in case you're interested to move down here, Romanian programmes don't pay taxes on profit if the company they work for meets some criteria, only health ensurance and pension fund taxes, which raise to about 9%. But on the other hand, the wages are much lower than in US or UK.