If you are looking for a job in the UK, or you are curious about how much people earn in different sectors and regions, you might want to know more about the salary levels in the UK. In this article, we will explore the average, minimum, and maximum salaries in the UK, as well as the factors that affect them, such as education, experience, age, and location. We will also answer some of the most frequently asked questions about salaries in the UK.
What is the average salary in the UK?
According to the Office for National Statistics (ONS), the mean average salary across the whole of the UK in 2020 was £38,600 for full-time employees and £13,803 for those working part-time. The average salary in England was £39,452 for those working full-time, and £13,845 for part-time jobs.
However, the mean salary in the UK can be skewed by a small number of people earning very high incomes. Therefore, it might be more accurate to look at the median salary, which is the middle point if all the salaries are plotted on a graph. According to the ONS, the median full-time salary in 2020 was £31,461, and the median salary for part-time workers was £11,234.
The average salary in the UK can also vary depending on the industry, job role, level of education, and experience. For example, some of the highest-paying industries in 2020 were financial and insurance activities (£43,821), electricity, gas, steam and air conditioning supply (£42,450), mining and quarrying (£42,386), information and communication (£42,267), and professional, scientific and technical activities (£37,484). Some of the highest-paying jobs in 2020 were chief executives and senior officials (£97,708), marketing and sales directors (£80,411), legal professionals (£74,701), information technology and telecommunications directors (£72,109), and advertising and public relations directors (£62,686).
On the other hand, some of the lowest-paying industries in 2020 were accommodation and food service activities (£19,136), arts, entertainment and recreation (£23,066), other service activities (£23,905), administrative and support service activities (£24,025), and wholesale and retail trade; repair of motor vehicles and motorcycles (£24,833). Some of the lowest-paying jobs in 2020 were elementary occupations (£18,489), sales and customer service occupations (£19,344), caring personal service occupations (£21,603), process plant and machine operatives (£23,905), and administrative occupations (£24,639).
What is the minimum wage in the UK?
The minimum wage is the legal minimum amount that employers must pay their workers per hour. The minimum wage is reviewed annually by the government based on the advice of an independent body called the Low Pay Commission. The minimum wage rates vary depending on the age of the worker and whether they are an apprentice or not.
The minimum wage rates as of April 2022 are as follows:
- National Living Wage (for workers aged 23 and over): £8.91 per hour
- National Minimum Wage (for workers aged 21 to 22): £8.36 per hour
- National Minimum Wage (for workers aged 18 to 20): £6.56 per hour
- National Minimum Wage (for workers aged 16 to 17): £4.62 per hour
- Apprentice Rate (for apprentices under 19 or in their first year of apprenticeship): £4.30 per hour
The National Living Wage is not to be confused with the Living Wage Foundation’s Living Wage, which is a voluntary rate that some employers choose to pay their workers based on the actual cost of living. The Living Wage rates as of November 2021 are as follows:
- Living Wage (for workers outside London): £9.50 per hour
- London Living Wage (for workers in London): £10.85 per hour
What is the maximum salary in the UK?
There is no legal maximum salary in the UK. However, there are some factors that can limit how much a person can earn in a given year. For example:
- Income tax: The amount of income tax that a person has to pay depends on their taxable income and their personal allowance. The personal allowance is the amount of income that a person can earn before they start paying income tax. For most people in 2020/21, the personal allowance was £12,500. The income tax rates for 2021/22 were as follows:
- Basic rate (for taxable income between £12,501 and £50,000): 20%
- Higher rate (for taxable income between £50,001 and £150,000): 40%
- Additional rate (for taxable income over £150,000): 45%
- National Insurance: National Insurance is a contribution that workers and employers pay to fund certain state benefits, such as the state pension, maternity allowance, and unemployment benefits. The amount of National Insurance that a worker has to pay depends on their earnings and their employment status. For employees in 2021/22, the National Insurance rates were as follows:
- Class 1 (for earnings between £183 and £962 per week): 12%
- Class 1 (for earnings over £962 per week): 2%
- Pension contributions: Pension contributions are payments that workers and employers make to a pension scheme to save for retirement. The amount of pension contributions that a worker has to make depends on the type of pension scheme they are enrolled in and the rules of their employer. For most workers in 2021/22, the minimum pension contribution rate was 8% of their qualifying earnings, of which at least 3% had to come from their employer.
- Student loan repayments: Student loan repayments are deductions that workers who have taken out a student loan have to make from their salary to repay their debt. The amount of student loan repayments that a worker has to make depends on the type of student loan they have and their income. For most workers who started their course after 1 September 2012 in England or Wales, the student loan repayment rate was 9% of their income over £26,575 per year.
Taking these factors into account, we can estimate the maximum net salary (after tax and deductions) that a person can earn in the UK in 2020/21. Assuming that they have no other sources of income or deductions, and that they are enrolled in a pension scheme with the minimum contribution rate, the maximum net salary would be:
- For a person earning £317,000 (the maximum average salary according to Salary Explorer): £153,731.40
- For a person earning £1 million: £402,731.40
- For a person earning £10 million: £3,602,731.40
In conclusion, salaries in the UK vary widely depending on various factors, such as industry, job role, education, experience, age, and location. The average salary in the UK in 2020 was £38,600 for full-time workers and £13,803 for part-time workers. The minimum wage in the UK in 2021 ranged from £4.30 to £8.91 per hour depending on the age and status of the worker. The maximum salary in the UK is not limited by law, but by tax and deductions. The maximum net salary that a person can earn in the UK in 2020/21 could be as high as £3.6 million for someone earning £10 million.
Frequently Asked Questions
Here are some of the most common questions that people ask about salaries in the UK:
- Q: How do I find out how much I should be paid for my job?
- A: You can use online tools such as Salary Checker or Glassdoor to compare your salary with others in similar roles and locations. You can also check the average salaries for different industries and occupations on the ONS website.
- Q: How do I negotiate for a higher salary?
- A: You can negotiate for a higher salary by preparing a strong case for why you deserve it. You should research the market rate for your role and location, highlight your achievements and contributions to your employer, and demonstrate your value and potential. You should also be confident, polite, and realistic when making your request.
- Q: How often do I get paid in the UK?
- A: The frequency of your pay depends on your employer and your contract. Most workers in the UK get paid either weekly or monthly. Some workers may get paid fortnightly or every four weeks.
- Q: How do I get paid in the UK?
- A: Most workers in the UK get paid by direct deposit into their bank account. Some workers may get paid by cheque or cash.
- Q: How do I pay tax on my salary in the UK?
- A: Most workers in the UK pay tax on their salary through a system called Pay As You Earn (PAYE). This means that your employer deducts your income tax and National Insurance from your pay before depositing it into your account. You can check your tax code and personal allowance on your payslip or online using HMRC’s Personal Tax Account.
- Q: How do I claim tax relief on my expenses in the UK?
- A: You may be able to claim tax relief on some of your work-related expenses if you have to pay