You earn £100
The government
takes £64
Every tax the average UK family actually pays — income, NI, VAT, fuel, council, corporate tax baked into prices. The real, honest number per £100 earned.
How much the state takes, by tax bracket
Click any salary below to see the full breakdown — including hidden taxes like corporation tax baked into prices, business rates passed through, and employer NI that quietly suppresses your wages.
True effective rate
£12,570 · Full Tax Stack
Per £100 of earnings, broken down by every tax you touch.
They take it from your wages, from your shopping, from your fuel, from your phone bill, from your insurance, from the price of everything you buy. Then they call you greedy for wanting a pay rise.
— The stacking problem
Why earning more doesn't feel like earning more
Each jump between brackets is brutal. Here's what actually lands in your pocket for every £20,000 pay rise.
Basic → Higher
- Income tax £4,000
- Employee NI £1,600
- Employer NI £3,000
- Extra VAT on spending £1,000
The 40% Hit
- Income tax (40%) £8,000
- Employee NI (2%) £400
- Employer NI £3,000
- Extra VAT on spending £2,500
The 60% Trap
- Income tax (40%) £8,000
- Personal allowance lost £4,000
- Employer NI £3,000
- Effective marginal rate 62%
Every tax you pay, in one list
You'll recognise income tax and VAT. You might not have clocked the rest. Here's what the average family touches every month — most of them stacked, several of them tax-on-tax.
Direct from pay
- Income tax 20–45%
- Employee NI 8% + 2%
- Employer NI 15%
- Dividend tax 8.75–39.35%
- Capital gains tax 18–24%
Property & wealth
- Council tax £2,280/yr avg
- Stamp duty land tax on purchase
- Inheritance tax 40% > £325k
- Capital gains on 2nd home 24%
- Annual Tax on Enveloped Dwellings
Car ownership
- Vehicle excise duty (road tax) £200+
- Fuel duty 52.95p/L
- VAT on fuel 20% (on top)
- Insurance Premium Tax 12%
- VAT on parts, MOT, servicing 20%
- Congestion / ULEZ / tolls
- DVLA fees, MOT fees, licences
Food & drink
- VAT on hot food, takeaways 20%
- VAT on confectionery, crisps, ice cream 20%
- Sugar levy £2.78/10L
- Alcohol duty varies
- VAT on alcohol 20%
- Basic groceries zero-rated 0%
Home & utilities
- VAT on electricity & gas 5%
- Environmental levies on energy ~£170/yr
- VAT on broadband, mobile, landline 20%
- TV licence £174.50
- VAT on appliances, furniture 20%
- VAT on home repairs & trades 20%
Phone, broadband, digital
- VAT on handset 20%
- VAT on monthly contract / SIM 20%
- VAT on broadband 20%
- VAT on Netflix, Spotify, Disney+ 20%
- VAT on apps & in-app purchases 20%
Travel
- Air Passenger Duty £13–£244
- APD on private jets £673/pax
- VAT on hotels, UK holidays 20%
- VAT on taxis, Uber 20%
- Train tickets 0%
Insurance (all of it)
- IPT on home, car, pet, gadget 12%
- IPT on travel insurance 20%
- IPT on warranties 20%
Embedded in prices
- Corporation tax 25%
- Business rates (passed through)
- Plastic packaging tax
- Landfill tax
- Climate change levy
- Aggregates levy, bank levy
Other duties & charges
- Tobacco duty £6.33 + 16.5%
- Vape duty (from Oct 2026) £2.20/10ml
- Betting & gaming duty 12%+
- Lottery duty 12%
- Stamp duty on shares 0.5%
- Plastic bag charge 20–40p
Health & personal
- NHS prescription £9.90/item
- NHS dental £27.40–£326.70
- VAT on private healthcare 20%
- VAT on haircuts, beauty 20%
- VAT on gym membership 20%
- Vet bills & pet insurance 20% + IPT
Fees that are taxes
- Passport renewal £88.50
- Driving test £62–£75
- MOT test £54.85
- Probate fees £273+
- Court, DBS, visa, NHS surcharge
- Building regs & planning
The average Brit works until mid-June just to pay their tax bill.
In 2025, every penny the average person earned up to 11 June went to the Treasury. That's 162 days of your working year. For higher earners with mortgages, cars, kids and lifestyle, the real burden crosses 50%.
If you're a business owner, structure matters more than salary.
Past about £50k, earning more through PAYE is a losing game. Pension salary sacrifice, limited company dividends, owning the assets through the business — that's where the real money lives. Want to talk through your setup?