Does the UK Have Payroll Taxes?

The United Kingdom does not use the term "payroll tax" in the same way as the U.S. Instead, employment-related deductions fall into two main categories:

• Income Tax (PAYE): A progressive tax deducted by employers from wages above the personal allowance (£12,570 for 2024/25). Rates are 20%, 40%, and 45% on successive bands.
• National Insurance Contributions (NICs): Paid by both employees and employers on earnings above a lower threshold. Employee rates are 8% (main) and 2% (higher); employer rate is 13.8% (2024/25).

These are collected monthly through the Pay As You Earn (PAYE) system. Self-employed individuals pay equivalent contributions via Self Assessment.