We always want to know what we have left for spending and savings after tax deductions. This information’s are very essential for anyone who wants to keep an eye on his or her expenses and savings. It is advisable to cut our clothes according to our salary after-tax deduction. Do not let your gross income fool you, wait until you know what you have left after tax before you hit the stores, clubhouse or the new clothing line that just launched down the road.
When you earn a gross income of £42,000 per annum, this should not be mistaken for your take-home pay. For us to get the salary after tax, we need to know our taxable income, national insurance deduction and then we can arrive at our take home pay.
If our gross income is £42k, then our taxable income will be £29,500. The yearly tax for 29,500 is £5,900, while our National insurance will be £3,900. To get our monthly take home pay, we deduct all our taxes from £42000. This gives us a take home pay for the year at £32,200.
To get our monthly take home pay, we will divide our take home pay (£32,200) by 12 months, this gives us 2,683.33 as the monthly salary after all tax deductions.
We round the cost to the nearest whole.
42000 AFTER TAX AND PENSION.
Since we already know our take home salary for the year (£32,200), knowing our take home pay of 42,000 after tax and pension become easy. To get our pension, we need to know the percentage of our income that we are willing to contribute to our pension. If you decide to contribute an automatic-enrolment of 15% of your income to a pension for the 2020/2021 tax year, your take home pay will be £27,908. This means £2,325.73 in your pocket every month.
Over the year, you will pay £4,827.20 in income tax and £3,900 in National Insurance and your pension deduction for the year will be £5,364.
Please note that the major determinant of your earnings after tax and pension is the percentage of your income that you are willing to put in your pension.
42000 AFTER TAX AND STUDENT LOAN.
There are two methods of repayment of undergraduate loans. If you started your undergraduate course before 1 September 2012, or you lived in Scotland or Northern Ireland, your loan will be repaid under “Plan 1”. If your course started on or after 1 September 2012 and you lived in England or Wales, you will repay your loan through Plan 2.
Loans for postgraduate study are repaid through the Postgraduate Loan plan.
Plan 1 loans are repaid at a rate of 9% on any gross earnings over £19,390 per annum. Plan 2 loans are repaid at a rate of 9% on any gross earnings over £26,575.
From April 2019, loans for postgraduate study are repaid through a separate Postgraduate Loan plan. These repayments are on top of any Plan 1 or Plan 2 repayments and are made at a rate of 6% on gross earnings over £21,000 per year.
Therefore, the student repayment loan for Plan 1 for a £42k earner will be £2,080 per annum. Plan 2-student repayment loan for a £42,000 earner will be £1,380 per year, while a postgraduate student repayment loan will be £1,260 for the year 2020.
– If your income is reduced during this period, your student loan repayments will decrease or stop completely.
– Repayments are made automatically through the tax system. Payments will depend on the amount you earn over the threshold during any given pay period.
– Repayments only start once you have started earning above a certain salary. This depends on which loan you have.
– If you are self-employed, HMRC will calculate what you owe each year in repayments, once you file your tax return.
In conclusion, if your gross income is 42.000, your monthly take-home pay will be £2,683.33 and your weekly £ 619.23 and of course, your daily net amount will be £ 123.85.
If you have a student loan plan 1, you will have repayment of £2,080
£1,380 for repayment plan 2 and £1,260 for postgraduate loan repayment.