The Salary Calculator

New – see your tax broken down by tax rate

by Admin

I’ve had requests in the past from users of the site saying that it would be useful to see a breakdown of your income tax, showing how much of it was in which tax band. Well, it took a while to get round to it, but now you will see in the results table that if you hover the mouse over the tax deductions, you get a list showing you how much of that tax was at 20%, how much at 40%, etc.

Of course, for a lot of people this will just be at 20%. If you earn a little more, though, you’ll pay some tax at 40% and those who are fortunate enough to earn over £150,000 will be paying some tax at a rate of 45%.

I recognise that there’s a little more work to be done on this – sometimes you might see there’s a discrepancy of 1p in the values (this is just because of rounding up / down and is pretty hard to avoid), and at the moment it’s not possible to see a breakdown of tax when you’ve received a bonus. I know that bonus time is when a lot of people move up into a new tax threshold so I will work to add that in the future, I promise!

If you want to have a go and try it out, here’s where to go: The Salary Calculator

Tags: bonus, income tax, Pay As You Earn, tax rates, The Salary Calculator

4 Comments to New – see your tax broken down by tax rate

1. 

   Hi.
   Im on 58k a year.
   I do go offshore at times so my salary do fluctuates on top of my annual salary.
   Recently my salary £10201.00 had a deduction of £3688.43(3211.85+476.58).
   looking at it looks like I’m taxed at 35%.
   Is this right?
   Thanks
puvan2805 on September 3rd, 2015
2. 

   The two deductions on your salary are Income Tax and National Insurance (NI), and they are calculated differently. The smaller one is NI, the larger one Income Tax. The details of how these are worked out are available on The Salary Calculator About Page. Neither of these deductions are calculated as a flat percentage of your total pay. It appears you are paid monthly, so each month the two deductions are worked out according to how much you earned that month:

   • NI is zero below a low threshold, then 12% of anything above that threshold – then there is a higher threshold above which you only pay 2% (on earnings above the threshold)
   • Income tax is zero below a certain threshold, then 20% on earnings above that threshold – if you earn more than a second threshold, it is 40% on the higher earnings (and there is a 45% rate if you earn more than £150,000 per year)

   So your overall average rate at which tax is deducted is not really relevant – you will pay some tax at 20% and some at 40%, plus some NI at 12% and some at 2%.

   n.b. NI is worked out each month, ignoring previous months – but Income Tax depends on how much you earn in the year. So Income Tax is worked out this month but considering how much you have already paid in previous months – since your salary fluctuates, you might get some slightly unexpected results but overall your tax will follow the bands described on the About page.

   I hope this helps!
admin on September 3rd, 2015
3. 

   Hi.Many thanks for that.
   So it means I can be taxed at 20% last mth (which they did) and 35% this month?To date my earning TXGross stands at £27,805 which stands below the 40% threshold….

   So £58,000 of taxable income and I get the standard Personal Allowance of £10,600. £47,400 (£58,000 minus £10,600)
   Basic rate tax at 20% i.e till £42,386 AND 40% on my remaining Salary?(People with the standard Personal Allowance start paying this rate on income over £42,385)

   will I be right to say im overpaying or Im over stating it.
   Please advice.
   Thanks
puvan2805 on September 3rd, 2015
4. 

   It’s not as simple as that, unfortunately. The tax-free Personal Allowance and the income thresholds are split over your pay periods – otherwise you would pay no tax in the first few months of the year, then 20% for a few months, then 40% at the end of the year. To make it so that (if you have a stable salary throughout the year) you pay the same each month, each month you get £883 (£10,600 / 12) tax-free, then the next £2,648 (£31,785 / 12) at 20%, then after that 40%. Try entering your normal £58,000 salary in to The Salary Calculator, and hover over the Income Tax values – you’ll see a breakdown of how much tax has been deducted at which rate.
   You earned £10201 last month, so you would expect to have Income Tax deducted £529.60 (£2648 x 20%) at 20%, and £2,668 ((£10,201 – (£883 + £2,648)) x 40%) at 40%, a total of £3,197.60. Your actual deduction was a bit higher, £3,211.85 – this is probably because you have earned more in previous months (if your salary fluctuates, your employer tries to compensate to make sure that by the end of the year you’ve had the right amount deducted for the whole year).
admin on September 3rd, 2015

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