How much income tax do I pay?

Income tax is a progressive tax, in other words, the rate rises with the level of income. The personal allowance (£5,035) is tax-free, but income over this figure is subject to taxation at the three rates, which are:

Lower rate (10%). This is payable on the first £2,150 of income over the personal allowance.

Basic rate (22%). This is payable on the next £33,000 of your earnings.

Higher rate (40%). This is payable on all taxable income above £35,400.

Therefore, a person earning £45,000 a year would pay no tax on the first £5,035, 10% on the next £2,150 (£215), 22% on £33,300 (£7,326) and 40% on the remaining £4,515 (£1,806), adding up to a total tax payment of £9,132.