The Salary Calculator

Bonus payments added!

As requested by a large number of visitors to the site, The Salary Calculator has been updated to allow you to enter bonus payments. If you might earn a bonus from your employer one month, you can now use the calculator to see what kind of a difference it will make to your payslip that month.

Bonuses are typically paid as a one-off extra on top of your usual salary. Your employer will work out what extra deductions (tax, National Insurance and Student Loan) will be required that tax year because of this extra payment, and will add these on top of your usual deductions for that month. Yes, this unfortunately means that you’ll pay a lot of tax, NI and Student Loan that month (boo!) – but some of your bonus will be left for you to enjoy!

For the purposes of displaying the information The Salary Calculator assumes that your salary is normally paid monthly, and shows you what a bonus month would look like compared to a normal month. Similar calculations will be done by your employer if you are paid weekly. To get started, click here to check out The Salary Calculator with bonus payments.

Tags: bonus, bonuses, income tax, national insurance, Pay As You Earn, pension, tax rates, The Salary Calculator

4 Comments to Bonus payments added!

1. 

   Hi – I am being told by my employer that my bonus payment will be subject to tax and NI PLUS the employers contributions. So for my £125 bonus I would only receive £85 – the deductions are employers tax, employees tax and NI – is this right? For the purposes of clarity, my employer has in excess of 1500 employees.

   Thanks for your help
kim southgate on April 5th, 2011
2. 

   Hi Kim,

   If you normally earn enough to be paying tax on your income, it sounds like the deductions you will be facing would be the normal employee’s tax and NI.

   Tax would be 20% of £125 = £25
   NI would be 12% of £125 = £15

   Total deductions = £25 + £15 = £40

   Leaving you with £125 – £40 = £85.

   If there are any other deductions from this your employer should be able to explain why they are being made – and if you’re not sure whether these deductions are correct the Citizens Advice Bureau will be able to talk things through with you. http://www.citizensadvice.org.uk/index/getadvice
admin on April 5th, 2011
3. 

   Quick question about national insurance calculation:

   Salary £423.08/week (£22,000.00/year)

   NI 12% of £284.08 (£423.08-139) is £34.09 (£34.0896 to 2sf)

   Therefore NI should be £1772.68/year (£34.09 * 52), is this not correct?

   Your site calculates it as £1773.00/year and £34.10/week.
Mike on June 13th, 2011
4. 

   Hi Mike,

   The calculator actually uses the annual NI thresholds to try to be more accurate over the year (of course, employers might use the monthly or weekly figures, all of which will give slightly different results). In this case, the threshold is £7225 per year (about £138.94 per week).

   £22,000 – £7,225 = £14,775
   12% of which is £1,773
   Divided by 52 for the weekly value is £34.10 (£34.0962 to 4s.f.)

   So you can see that the difference between the different calculations is actually very small – employers are free to use whichever matches their payroll cycle, sometimes with results different from the calculator by a few pennies.

   I hope this helps!
admin on June 13th, 2011

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