Tax 101 for doctors – how much tax will I pay?

  • February 12, 2020

As an NHS employee, you will pay Income Tax and National Insurance on your wages through the PAYE system. 

Overseas doctors will have tax and national insurance automatically deducted from their monthly salary. How much deducted depends on how much you earn. 

PAYE stands for Pay As You Earn

Some income is tax free. You can earn a certain amount of income each year, called your Personal Allowance, before you need to pay any Income Tax. 

The personal allowance is a fixed amount set against your gross income. 

In all four UK countries, the Personal Allowance is set at £12,500 (tax free income). It is worth noting that if you earn more than £125,000 you will not receive a personal allowance. 

The Personal Allowance will also be set at £12,500 for 2020/21. 

Any pay above the personal allowance is then taxed according to your salary and pension. 

How much you pay is fixed as a percentage according to a band system. In Scotland the tax bands vary from those set in England, Wales and Northern Ireland, see below: 

Tax bands in Scotland


Taxable income

Scottish tax rate

Personal Allowance

Up to £12,500


Starter rate

£12,501 to £14,549


Basic rate

£14,550 to £24,944


Intermediate rate

£24,945 to £43,430


Higher rate

£43,431 to £150,000


Top rate

over £150,000


Tax bands in England, Wales & Northern Ireland


Taxable income

Tax rate

Personal Allowance

Up to £12,500


Basic rate

£12,501 to £50,000


Higher rate

£50,001 to £150,000


Additional rate

over £150,000


Your NHS employer will set your salary and you will be automatically set up to pay your pension, tax and national insurance. However, at IMG Connect we think that it’s important to check you have the right tax code and are paying the right amount. 

You can check that you are paying the right amounts using this online government tool. This will allow you to check the following your Personal Allowance and tax code are accurate. As well as helping you to understand how much tax you’ve paid in the current tax year and how much you’re likely to pay for the rest of the year. 

Can I make any more savings? 

You will get tax relief on your pension payments. The NHS pension scheme is an attractive one, with very few schemes in the UK even coming close to this benefit. Find out more about your NHS benefits here.

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