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You forgot employers NI (for the unfamiliar - the employER has to pay 15% from April - not a typo - of part of your salary in taxes to the government and this

You forgot employers NI (for the unfamiliar - the employER has to pay 15% from April - not a typo - of part of your salary in taxes to the government and this is hidden from your payroll taxes as an employee) What's the % if you include those deductions? In my case my tax rate is 29% but employers NI is 13% so 42%, going up to 44/45% in April

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walthamstow 2y ago
I didn't forget it, it's not a deduction from my salary. You don't pay 42% of your salary. Employee NI went down by 2pts last year, employer NI is going up by 1.2pts this year.
- benmmurphy 2y ago
  Employee NICs and employer NICs are effectively the same thing, they just have different names. Your employer has a bucket of money to pay employees with. Some of this money is given to the government and some of this money is given to their employees. Saying the money given to the government is on behalf of the employee or the employer is mostly irrelevant. There are cases where it is relevant if the employee or employer can get tax refunds against the money but mostly it is irrelevant. Who actually pays the burden of tax is a question of tax incidence (https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence). In theory the burden of income taxes could even be falling on your employer. But it is very likely that most of the burden of income taxes/payroll taxes falls on the employee. But if you are doing cross-country comparisons its much easier to just total up all taxes related to employment in one bucket and compare them under the assumption the incidence burden would be similar across different countries.
  - walthamstow 2y ago
    I think when doing casual person-to-person comparisons, like on here, it is actually easier to compare payslips. Most importantly, I don't believe that if employer NI went away tomorrow that money would come to me in increased salary. Including it as a tax on me makes the assumption that it would.
- switch007 2y ago
  Fair enough if you want to believe you only pay 26% tax. Sounds like you know about it but disagree it's unrealised salary? You can see why the government created it in such a way !
  - walthamstow 2y ago
    I don't believe that if employer NI were removed that money would come to me, so I don't personally see it as unrealised salary, but that's just an opinion.

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walthamstow 2y ago

I didn't forget it, it's not a deduction from my salary. You don't pay 42% of your salary. Employee NI went down by 2pts last year, employer NI is going up by 1.2pts this year.

benmmurphy 2y ago
Employee NICs and employer NICs are effectively the same thing, they just have different names. Your employer has a bucket of money to pay employees with. Some of this money is given to the government and some of this money is given to their employees. Saying the money given to the government is on behalf of the employee or the employer is mostly irrelevant. There are cases where it is relevant if the employee or employer can get tax refunds against the money but mostly it is irrelevant. Who actually pays the burden of tax is a question of tax incidence (https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence). In theory the burden of income taxes could even be falling on your employer. But it is very likely that most of the burden of income taxes/payroll taxes falls on the employee. But if you are doing cross-country comparisons its much easier to just total up all taxes related to employment in one bucket and compare them under the assumption the incidence burden would be similar across different countries.
- walthamstow 2y ago
  I think when doing casual person-to-person comparisons, like on here, it is actually easier to compare payslips. Most importantly, I don't believe that if employer NI went away tomorrow that money would come to me in increased salary. Including it as a tax on me makes the assumption that it would.
switch007 2y ago
Fair enough if you want to believe you only pay 26% tax. Sounds like you know about it but disagree it's unrealised salary? You can see why the government created it in such a way !
- walthamstow 2y ago
  I don't believe that if employer NI were removed that money would come to me, so I don't personally see it as unrealised salary, but that's just an opinion.