Question: I just started working in the UK for the first time and received my first payslip. Another colleague of mine got his second payslip here, from the same company.

We were surprised that in the detail no amount for "Tax" was deducted.

I researched a bit and found that for the tax code [1060L](http://taxaid.org.uk/guides/information/issues-for-employees/employee/form-p46), specified in our payslip, we got some tax free income for a while.

However, since I'm not an English native speaker, I still have some doubts on how it works.

As I understand it:

* I am entitled to 10600£ per year tax free and until I reach that value, I won't pay tax;
* When I do reach 10600£, taxes will be deducted as for everybody else;

Is this correct?

Answer: 
In the UK, you pay income tax for your income in a tax year, which is from April to March. Roughly speaking, currently there is I think £10,600 of income tax free, then you pay 20% tax on the next £31,000 or so, 40% on another £110,000 and finally 45% on the rest (I'd love to have that problem). 

Your employer should make sure that you pay the same amount of tax every month, and that over the tax year you pay the correct amount. If you started work in January and you make £2,000 a month, then your employer can see that you will make £6,000 in the tax year, which is tax free, so you don't pay tax. 

If you started work in January and you make £4,000 a month, then your employer can see that you will make £12,000 in the tax year, so you should pay 20% of £1,400 = £280 in that year, so they should deduct about £93.33 of tax every month, so at the end of the year you have paid the right amount. 

If this wasn't your first job, then they need to take into account what you made in your previous job, and how much tax was paid in your previous job; you would have a form P45 from your previous employer, which you hand to your next employer so they can do the tax calculation correctly. 

"Emergency tax" was mentioned elsewhere: If you switch jobs, and you don't hand over your P45, then the next company doesn't know how much you made in your previous job. They must make sure that you don't pay too little, so they will assume that you made tons of money and have to pay 45% on everything you earn above that, so they will actually deduct 45% tax from your salary. That's called emergency tax. (I might be wrong and it might be only 40%). Of course you can do your tax return at the beginning of the next tax year in April, and HMRC will see that you paid much too much tax, and refund every penny that you overpaid.
Your payslip should not show tax deductions until you have fully utilised your cumulative personal allowance for the tax year, if you started working somewhere in the middle of the tax year.
example,
Starting date: 01/01/2016
Salary: 2500

Income tax = 20%( £2500 - £7947(883 \*9) ) = 0

£7947 is cumulative personal allowance for 9 months from April, 2015 to Dec, 2015. 

This employee will not pay tax for the entire tax year of 2015/2016 as his total income is only £7500 (3\*£2500), which is below the personal allowance. 
Assume tax has been deducted by mistake from his income, it will be rebated later on. 

Correct me if I made any mistake.