UK taxes vs US taxes

[mawilson 2,133]

Let's say your total adjusted taxable income is $200,000 = £100,000

UK income tax: £33,504

UK National Insurance tax: £3,964

Total UK taxes: £37,468 = $74,936 = 37% of taxable income

US income tax: $45,200

US Social Security tax: 6.2% (or 12.4% if self-employed) on $97,500 = $6,045 (or $12,090 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $2,900 ($5,800 if self-employed)

Total US taxes: $54,145 ($63,090) = 27% (31.5%) of taxable income

For taxable income of $200,000, the difference between UK and US taxes is $20,791 (or $11,846 if self-employed)

Now let's try $50,000 = £25,000

UK income tax: £5,232

UK National Insurance tax: £2,753

Total UK taxes: £7,985 = $15,970 = 31.9% of taxable income

US income tax: $6,718

US Social Security tax: 6.2% (or 12.4% if self-employed) = $3,100 (or $6,200 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $725 ($1,450 if self-employed)

Total US taxes: $10,543 ($14,368 if self-employed) = 21% (28.7%) of taxable income

For taxable income of $50,000, the difference between UK and US taxes is $5,427 (or $1,602 if self-employed)

In both cases, the difference is almost 10%!

[Dan J 277]

Let's say your total adjusted taxable income is $200,000 = £100,000

UK income tax: £33,504

UK National Insurance tax: £3,964

Total UK taxes: £37,468 = $74,936 = 37% of taxable income

US income tax: $45,200

US Social Security tax: 6.2% (or 12.4% if self-employed) on $97,500 = $6,045 (or $12,090 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $2,900 ($5,800 if self-employed)

Total US taxes: $54,145 ($63,090) = 27% (31.5%) of taxable income

For taxable income of $200,000, the difference between UK and US taxes is $20,791 (or $11,846 if self-employed)

Now let's try $50,000 = £25,000

UK income tax: £5,232

UK National Insurance tax: £2,753

Total UK taxes: £7,985 = $15,970 = 31.9% of taxable income

US income tax: $6,718

US Social Security tax: 6.2% (or 12.4% if self-employed) = $3,100 (or $6,200 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $725 ($1,450 if self-employed)

Total US taxes: $10,543 ($14,368 if self-employed) = 21% (28.7%) of taxable income

For taxable income of $50,000, the difference between UK and US taxes is $5,427 (or $1,602 if self-employed)

In both cases, the difference is almost 10%!

What about state taxes?

[no name 1]

Let's say your total adjusted taxable income is $200,000 = £100,000

UK income tax: £33,504

UK National Insurance tax: £3,964

Total UK taxes: £37,468 = $74,936 = 37% of taxable income

US income tax: $45,200

US Social Security tax: 6.2% (or 12.4% if self-employed) on $97,500 = $6,045 (or $12,090 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $2,900 ($5,800 if self-employed)

Total US taxes: $54,145 ($63,090) = 27% (31.5%) of taxable income

For taxable income of $200,000, the difference between UK and US taxes is $20,791 (or $11,846 if self-employed)

Now let's try $50,000 = £25,000

UK income tax: £5,232

UK National Insurance tax: £2,753

Total UK taxes: £7,985 = $15,970 = 31.9% of taxable income

US income tax: $6,718

US Social Security tax: 6.2% (or 12.4% if self-employed) = $3,100 (or $6,200 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $725 ($1,450 if self-employed)

Total US taxes: $10,543 ($14,368 if self-employed) = 21% (28.7%) of taxable income

For taxable income of $50,000, the difference between UK and US taxes is $5,427 (or $1,602 if self-employed)

In both cases, the difference is almost 10%!

What about state taxes?

and city as well.

[bszoom42 0]

Let's say your total adjusted taxable income is $200,000 = £100,000

Woohoo! with that much income, i wouldn't care about taxes!

[mawilson 2,133]

What about state taxes?

Varies a lot by state - some states don't even have them. Florida, Washington,

New Hampshire to name a few.

Anyhow - I was comparing UK and US taxes for the same adjusted gross income -

after all the exemptions and deductions. You can legally deduct a lot more #### here.

[Dan J 277]

Let's say your total adjusted taxable income is $200,000 = £100,000

UK income tax: £33,504

UK National Insurance tax: £3,964

Total UK taxes: £37,468 = $74,936 = 37% of taxable income

US income tax: $45,200

US Social Security tax: 6.2% (or 12.4% if self-employed) on $97,500 = $6,045 (or $12,090 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $2,900 ($5,800 if self-employed)

Total US taxes: $54,145 ($63,090) = 27% (31.5%) of taxable income

For taxable income of $200,000, the difference between UK and US taxes is $20,791 (or $11,846 if self-employed)

Now let's try $50,000 = £25,000

UK income tax: £5,232

UK National Insurance tax: £2,753

Total UK taxes: £7,985 = $15,970 = 31.9% of taxable income

US income tax: $6,718

US Social Security tax: 6.2% (or 12.4% if self-employed) = $3,100 (or $6,200 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $725 ($1,450 if self-employed)

Total US taxes: $10,543 ($14,368 if self-employed) = 21% (28.7%) of taxable income

For taxable income of $50,000, the difference between UK and US taxes is $5,427 (or $1,602 if self-employed)

In both cases, the difference is almost 10%!

What about state taxes?

and city as well.

Since UK national health care covers everyone, you would have to include the average health care insurance premium as part of the 'taxes'

[mawilson 2,133]

Let's say your total adjusted taxable income is $200,000 = £100,000

Woohoo! with that much income, i wouldn't care about taxes!

Believe me, you would. $200,000 is not that much for a household of two,

if both people are educated professionals. At least not in NYC.

[Trompe le Monde 1,107]

What about state taxes?

Varies a lot by state - some states don't even have them. Florida, Washington,

New Hampshire to name a few.

Anyhow - I was comparing UK and US taxes for the same adjusted gross income -

after all the exemptions and deductions. You can legally deduct a lot more #### here.

Woiuldn't that depend if you actually can deduct more than the standard deductible?

I pay 9% in CA - as a percentage of income, I am taxed a bit more in the US

[mawilson 2,133]

Since UK national health care covers everyone, you would have to include the average health care insurance premium as part of the 'taxes'

Well - that was sorta my point. The NHS sure isn't "free" - it ends up costing the taxpayer about 10% of their salaries.

Woiuldn't that depend if you actually can deduct more than the standard deductible?

You don't have to itemise if you have a business and business expenses.

[Trompe le Monde 1,107]

You don't have to itemise if you have a business and business expenses.

Not really helpful if you are not a business owner and work for someone else

[rebeccajo 14]

Let's say your total adjusted taxable income is $200,000 = £100,000

UK income tax: £33,504

UK National Insurance tax: £3,964

Total UK taxes: £37,468 = $74,936 = 37% of taxable income

US income tax: $45,200

US Social Security tax: 6.2% (or 12.4% if self-employed) on $97,500 = $6,045 (or $12,090 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $2,900 ($5,800 if self-employed)

Total US taxes: $54,145 ($63,090) = 27% (31.5%) of taxable income

For taxable income of $200,000, the difference between UK and US taxes is $20,791 (or $11,846 if self-employed)

Now let's try $50,000 = £25,000

UK income tax: £5,232

UK National Insurance tax: £2,753

Total UK taxes: £7,985 = $15,970 = 31.9% of taxable income

US income tax: $6,718

US Social Security tax: 6.2% (or 12.4% if self-employed) = $3,100 (or $6,200 if self-employed)

US Medicare tax: 1.45% (or 2.9% if self-employed) = $725 ($1,450 if self-employed)

Total US taxes: $10,543 ($14,368 if self-employed) = 21% (28.7%) of taxable income

For taxable income of $50,000, the difference between UK and US taxes is $5,427 (or $1,602 if self-employed)

In both cases, the difference is almost 10%!

What about state taxes?

and city as well.

Since UK national health care covers everyone, you would have to include the average health care insurance premium as part of the 'taxes'

And co-pays, and other out of pocket medical expenses.

Also helpful to compare what you might draw on your UK pension if you were contributing and retired there, vs. what you will draw in the US on Social Security. If you want to get a true idea of how those 'mandatory deductions' are going to benefit you later.

[mawilson 2,133]

You don't have to itemise if you have a business and business expenses.

Not really helpful if you are not a business owner and work for someone else

It's VERY helpful. I work for someone else *and* have my own business,

and so should everyone else - it's a tax deduction gold-mine.

[mawilson 2,133]

And co-pays, and other out of pocket medical expenses.

You don't think the extra 10% you're saving here covers your co-pays?

Also helpful to compare what you might draw on your UK pension if you were contributing and retired there, vs. what you will draw in the US on Social Security. If you want to get a true idea of how those 'mandatory deductions' are going to benefit you later.

UK pension is a joke. The current basic UK pension is something like £77 per week.

You'd get more out of Social Security here.

[Trompe le Monde 1,107]

You don't think the extra 10% you're saving here covers your co-pays?

Not if that 10% is paying your state taxes

[mawilson 2,133]

You don't think the extra 10% you're saving here covers your co-pays?

Not if that 10% is paying your state taxes

Then it's about the same for you, I guess - sans the NHS.