The Salary Calculator

New tool for those thinking of retiring

by Admin

If you are thinking of retiring soon, you might be wondering what kind of effect taking your pension would have on your take-home pay. This is not quite as simple as it might sound at first – the deductions from your pension income will not be the same as those on your salary. For example, you might be paying into a pension with some of your salary, which of course you would not do with income from a pension. And National Insurance is not deducted from pension income, whereas it is deducted from your salary if you are below state pension age.

With this in mind, I have combined a few options from the Two Jobs calculator (which shows you the take-home pay if you have two income at once) and put them in the Two Salaries Comparison Calculator (which compares two incomes side-by-side). Now, you can enter different options for the two different incomes you are comparing (e.g. different bonuses or overtime) – and you can also tick a box on the “Additional Options” tab to indicate that one or other of the incomes is a pension. This income will then not have National Insurance deducted from it – so you can enter the details of your employment for the first income and the details of your pension in the second income, tick the box to say the second job is actually a pension, and the calculator will deduct NI only from the first income.

If you are thinking of retiring, or just investigating a new job which would have a different salary and different deductions, try out the Two Salaries Comparison Calculator.

Tags: income tax, national insurance, pension, Pensions, retire, retirement, The Salary Calculator

New pension options

by Admin

A while ago, I considered adding an option to the calculator allowing you to enter the amount in £ that you contribute each month, rather than the percentage. I thought this would be useful for people whose employers didn’t use their salary as the basis for the pension contributions but instead “pensionable pay” or something similar. I never got round to it because I thought it was too much of a niche and would make the calculator too confusing. However, the current Coronavirus situation with people being put on furlough made me realise that more people would be affected by this than usual, so I have added this option.

I had an email from a visitor to the site who said that his pension contributions in furlough were based on his full salary, not his reduced, furlough pay. As such, the percentage he was entering was giving the wrong deduction when applied to the reduced pay. To combat this, I have now added the option to switch from a percentage input to a £ input. Enter the amount you contribute, choose the pay period, select what kind of pension you have, and then the calculator will use this amount as your pension contribution. To make this even easier, on the Furlough Calculator you can enter the percentage as usual but tick the “Don’t reduce pension” option, in which case the calculator will automatically apply the pension contributions from your full salary to your reduced salary.

People who contribute to a personal pension (i.e., not through their employer) might also find it easier to use the £ amount option, as it may be easier than calculating the percentage.

Tags: coronavirus, covid-19, furlough, pension, Pensions, The Salary Calculator

New tool – Sick Pay Calculator

by Admin

With many people having to take time off work due to the current situation with COVID-19, I thought I would try to create a sick pay calculator. If you will be taking time off, and your employer’s policy states that you will receive reduced (or no) pay for your time off, the Sick Pay Calculator will try to estimate the effect on your take-home pay.

You can enter the number of days on a percentage of your normal pay (e.g. 50% for half pay), the number of days on Statutory Sick Pay (n.b. the calculator is not able to tell whether or not you are eligible for SSP, learn more from Citizens Advice), and the number of unpaid days. The calculator will use this information to estimate how your payslip will change.

Please note that different employers calculate things like unpaid leave in different ways, so the calculator’s results may differ from those on your payslip. Also, how much you will get paid for time off depends primarily on what your employer’s relevant policies state – you will need to know what you are entitled to before using the calculator.

Please let me know if you have any trouble using the calculator – I’ve tried to reduce the number of unexpected results, but it is possible with a lot of time off and with many options such as pensions and student loans applied that the answers given might be a bit unusual!

Tags: coronavirus, covid-19, HMRC, income tax, Jobs, national insurance, Pay As You Earn, Pensions, sick pay, student loans, The Salary Calculator, unpaid leave

New! Taxable cash allowances

by Admin

For some time now, The Salary Calculator has allowed you to enter the value of any taxable benefits that you receive (such as private health insurance, or a company car). These are things that your employer pays for and you get the benefit of, and therefore you pay tax on the value of these benefits even though you don’t receive any extra cash. I have had a lot of people contact me asking about a similar option, but this time for when your employer pays you extra cash so that you can pay for something yourself – a common one was a car allowance (as opposed to a company car) or a mobile phone allowance.

This option has finally been added to the calculator, on the Taxable Benefits tab. If you receive such an allowance, enter the value of it into the “cash allowances” option, and choose whether you receive this amount annually, monthly or weekly. Cash allowances are treated differently from benefits in kind in two main ways – firstly, they are extra cash so your take-home pay will increase despite the extra tax, and secondly, National Insurance is deducted as well as income tax.

You can also choose, on the Pension tab, whether your employer includes the value of your cash allowances when working out your pension contributions.

If you receive a cash allowance (or have been offered one) and would like to see what difference it would make, try it out on The Salary Calculator!

Tags: benefits in kind, cash allowances, income tax, national insurance, Pay As You Earn, pension, Pensions, taxable benefits, The Salary Calculator

2019 General Election Calculator

by Admin

A General Election is taking place in the UK on 12th December, and all the main parties have released their manifestos – most of which have some policies which would affect your take-home pay, if they were to be elected. It’s a small part of the puzzle, but to help you try to figure it out, the 2019 Election Calculator has been created – this attempts to show you what your take-home pay would look like if each party came to power.

Some parties have proposed only small changes, and others have much larger plans. The calculator has had to make some assumptions, as the parties don’t always provide all the detail – anything that isn’t specified in a manifesto has been left as it currently is.

It is also worth noting that the parties also have policies which affect other areas of tax (such as VAT, inheritance tax, capital gains tax etc), and other benefits such as free childcare, which means that your finances are likely to be affected by things not considered by this calculator. If you’d like to give it a go, please head over to the 2019 Election Calculator – and let me know if you think anything is missing!

Calculators from previous elections have been archived:

• 2017 Election Calculator
• 2015 Election Calculator
• 2010 Election Calculator

Tags: 2019, 50% tax, election, general election, income tax, national insurance, Pay As You Earn, Pensions, personal allowance, tax rates, The Salary Calculator