The Salary Calculator » Income Tax

The Logic of Life

admin — Sat, 21 Aug 2010 15:11:49 +0000

A little over a year ago, I recommended Tim Harford’s The Undercover Economist. Now, I can also recommend his latest book, The Logic of Life, to anyone who wants to understand how economic “rational” thinking affects all of us every day.

In The Logic of Life, Tim explains how all of us act rationally (that is, with reasoned self-interest) every day, even in some situations where we think we are acting purely emotionally or altruistically. He demonstrates that some actions which appear to be irrational (like government subsidies that benefit only a few special-interest groups but increase tax for many other voters – surely the government would try to please the most voters?) are actually rational. He doesn’t argue that every decision we make is completely rational, just very many of those that we don’t even spend time thinking about.

My favourite part is where he gives several reasons why your boss is overpaid – something we’ve all wondered in the past, and it’s both reassuring and disconcerting to learn that there might be a legitimate reason for it. More disconcerting is the chapter explaining that racism can be rational – and demonstrating that while rationality may be more prevalent than we expect, it is not always to be applauded.

If you’d like to get some insight into a few of life’s little mysteries, click on the link to the right to buy the book. You’ll be helping to support this website and you might just learn something!

The VAT Calculator launched

admin — Sat, 03 Apr 2010 14:55:43 +0000

I’m pleased to announce the launch of The Salary Calculator’s sister site, The VAT Calculator. The VAT Calculator allows you to either enter a price to which VAT should be added to give the total, or to enter the total price and calculate what the price was before VAT.

Yes – it’s two relatively simple calculations, but I hope it that some visitors will find it useful! Comments and suggestions are as ever welcome, either here at The Salary Calculator or email The VAT Calculator.

Take a look at The VAT Calculator.

New, higher tax rate

admin — Sun, 14 Jun 2009 13:48:45 +0000

From April 2010, new tax rates will take effect. Most of us won’t be affected by the changes, as they only affect those with annual income in excess of £100,000.

The first change is the creation of a new income tax band for taxable income above £150,000, which will be taxed at a rate of 50%. This will make a significant difference to anyone who does earn this much as they currently are paying only 40% on this income.

The second change is a reduction of the personal allowance of £1 for every £2 your income is over £100,000. Your personal allowance is the amount you are allowed to earn without paying tax – by reducing this allowance the government are able to take more tax off your hands. In fact, I have calculated that whereas currently for every extra £2 you earn over £100,000 you take home £1.20, those of you lucky enough to be in this pay bracket will be taking home only £0.80 of that £2 from April 2010.

The Salary Calculator will be updated with these new rates early in 2010 when the details of personal allowances and other thresholds for that tax year are made available.

More details are available on the HMRC website here (PDF).