by Admin

The Salary Calculator has been updated with new options, to help those who receive taxable benefits, or “benefits in kind”, from their employer. As well as paying you your salary, your employer might offer other benefits, such as a company car or private healthcare. They pay for these benefits directly, but you have to pay tax on the value of the benefit (generally, you do not pay National Insurance on these benefits). Sometimes this extra tax is collected through your tax code – it lowers your tax-free personal allowance so that you pay the extra tax automatically. However, you may not know what your tax code will be with this benefit, or your employer might deduct the extra tax directly.

If this is the case, you can now enter the value of the benefit into the “Taxable Benefit” tab on the calculator, choose whether this amount is weekly, monthly or yearly, and then run the calculations to see how it affects your take-home pay. Since the amount of tax you pay will go up when you receive one of these benefits, your take-home pay will go down – but of course you’ll be receiving the benefit that you’ve paid tax on. This information will help you see how much the benefit will actually cost you each month.

To get started, head over to The Salary Calculator.

Tags: , , , , , , ,

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.

2 Comments to New – see the effects of benefits in kind

  1. ref. taxable benefits under Take Home Salary Calculator:

    do I enter the tax payable? or the BIK? i.e. the monthly value of the tax payable on a company car is £400 – do I enter this? or the total value before tax?

    thanks
    Andy

  2. Andy Lee on January 13th, 2017
  3. Hi Andy,
    Enter the total taxable value of the benefit – the calculator will work out the additional tax, which will depend on which tax band you are in. In fact, the addition of a taxable benefit might be enough to push you into a higher tax band.
    At a guess, in your example, this value is probably £1000 per month. If you already know that the additional tax you pay is £400, though, you might already have this being worked out in your tax code – if so, you don’t need to add it in the Taxable Benefits field.
    I hope this makes sense!

  4. admin on January 13th, 2017

Leave a comment

*

Sponsored Links

Close X

This website uses cookies - for more information, please click here.