Eli5 Do tax rates kick in at each cutoff? Or if you earn a set amount your full income is taxed at the same rate

Question

Just wondering when looking at jobs putting me into higher tax brackets, if tax was say 20% for earning £30k, and £31k a year was taxed at 25%, would my first 30k of income be taxed at the 20% or my full salary taxed at 25%? And if so then how do you ever make jumping up to the next tax band viable?

In: Economics

Answer 1

No, income up to £12,500 is not taxed. The next £37,500 is taxed at 20% etc. (cutoffs and percentages for the UK are from google).