Salaries and Tax
The upturn in the market is having a positive effect on salaries paid by UK law firms, which have started to gently rise again after a 4 year post-dotcom hiatus. The salaries below may look huge, but, for comparison purposes, Aussies and Kiwis will have to knock a year or two off their PQE figures to compensate for the shorter practical training they undergo compared to the 2 year English training contract. Middle tier firms typically pay around £3,000 less than the top tier, while top regional firms pay around 40% less. Many of the London offices of US firms pay 10%-20% above the top UK firms, while a few pay the same rate as their New York associates – currently around £70,000 at newly-qualified level.
Tax rates in the UK are lower than Australia and New Zealand, but social security (national insurance) payments are much higher. The end result is that on a salary of £50,000, the overall bill is broadly similar. At higher salaries, Australia's top rate of 47% means that your UK tax bill becomes relatively lower.
Average salaries - London top tier firms
| NQ |
£48-51,000 |
| 1 PQE |
£52-56,000 |
| 2 PQE |
£55-64,000 |
| 3 PQE |
£58-71,000 |
| 4 PQE |
£60-77,000 |
| 5 PQE |
£62-90,000 |
| 6 PQE |
£65-100,000 |
Source: EJ Legal
Tax rates - United Kingdom
| Income Tax |
|
| £0-4,895 |
0% |
| £4,896-6,915 |
10% |
| £6,916-38,315 |
22% |
| £38,316+ |
40% |
| National Insurance |
|
| £0-32,760 |
11% |
| £32,761+ |
1% |
Further information:
www.direct.gov.uk
|
