Archive for January, 2011

Tax codes added to The Salary Calculator

After a great many requests from users of the site, I’ve finally added support for tax codes to The Salary Calculator. If you know what your tax code is, you can now use it on the take home pay calculator, hourly wage calculator and the required salary calculator to get a more accurate indication of your take home pay.

Tax codes exist because in some circumstances HMRC may adjust your personal allowance, often because of benefits like a company car or private healthcare. They do this by providing your employer with a tax code which indicates what your personal allowance should be.

The usual effect of such an adjustment would be to lower your personal allowance, meaning that you pay tax on more of your income. If you receive benefits such as private healthcare or a company car through your employer, you pay more tax on your salary so that the value of these benefits is also taxed.

Tax codes usually indicate the personal allowance by including a number which should be multiplied by 10 and have £5 added to it to make the personal allowance – e.g. the standard code 647L indicates a personal allowance of £6,475.

  • L, P, Y and T codes indicate the personal allowance to be assigned as described above
  • K codes indicate the amount by which the taxable income should be increased, if you owe tax on other earnings which should have been taxed
  • A BR code indicates you pay 20% basic rate tax on all income
  • A D0 code indicates you pay 40% tax on all income
  • An NT code indicates you pay no tax

In most cases your tax code will stay the same if you change jobs, so now you can use The Salary Calculator to get a more accurate indication of what a pay rise or a new job would mean to you each month!

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Saturday, January 8th, 2011 About The Salary Calculator, Income Tax No Comments

None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

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