The Salary Calculator

April 2015 tax rates applied

by Admin

From 6th April 2015, new tax thresholds and personal allowances will apply, and The Salary Calculator has been updated with these new values.

Although the default results are still for the current tax year, when you enter your details into the take home pay calculator, you will see a summary line at the bottom of the results showing how things will change from 6th April. Click on this line and you can see a side-by-side comparison of the 2014/15 and 2015/16 tax years, and a breakdown of how it will affect your take home pay. You can also choose 2015/16 in the tax year drop-down in the normal take home calculator.

The main change this year is an increase in the default personal allowance from £10,000 to £10,600 – which means you can earn an extra £600 without paying any income tax. The default tax code will change from 1000L to 1060L (if your tax code is different, it will probably change for next year to reflect the larger personal allowance). The Student Loan repayment threshold has also increased from £16,910 to £17,335, potentially saving those who are repaying their loans £38.25 per month (although this will also mean it takes longer to repay your loan).

Tags: April 2015, HMRC, income tax, national insurance, Pay As You Earn, personal allowance, student loans, tax rates, The Salary Calculator

Bonus pay periods

by Admin

Prompted by a comment from Rob on the original blog post, back from when support for bonus payments was added to The Salary Calculator (original post here), The Salary Calculator has been updated so that you can choose your normal pay period when you enter a bonus. Previously, the calculator assumed that you were paid on a monthly basis, and displayed a normal monthly payslip alongside a payslip including the bonus. Now, you can choose whether you are paid monthly, 4-weekly, 2-weekly or weekly and see a side-by-side comparison of a normal payslip with one including your bonus.

It’s important to note that your employer may not perform their bonus calculations in the same way – sometimes (particularly near the start of the tax year) you may have more tax and NI deducted than predicted by the calculator. Normally these over-deductions are corrected in subsequent payslips.

Head this way for the Salary Calculator with bonus payments!

Salary Sacrifice and charitable giving

by Admin

A new update to The Salary Calculator allows you to enter deductions which were previously not available. Among the usual options is one for Salary Sacrifice, if you have contractually agreed to reduce your salary by a certain amount in exchange for receiving some other benefit. There are also new options for pre-tax deductions such as Gift Aid and Give As You Earn and after-tax deductions which are just taken out of your payslip each month.

Salary Sacrifice is often used for pension contributions, but The Salary Calculator already has an option for Salary Sacrifice pensions under the “Pension” tab where you can enter a percentage of your salary to be deducted. If you prefer to enter the monthly (or annual) £ amount that you are sacrificing, you can leave the pension field blank and enter the £ amount in the “Salary Sacrifice” tab. Alternatively, you might be making a salary sacrifice for benefits other than a pension (or in addition to a pension) – in which case just enter the amount you’ve sacrificed into the new field.

The “Other Deductions” tab has two new fields on it. One is for pre-tax deductions, like Gift Aid or other charitable contributions like Give As You Earn. The second is for after-tax deductions – i.e. an amount deducted from your take-home pay each month with no impact on your tax or National Insurance.

Head over the The Salary Calculator to check out these new options. I hope you find these new options useful – if you have any feedback or thoughts (or suggestions for other things to be added), please let me know!

Tags: charity, deductions, GAYE, give as you earn, income tax, national insurance, pension, salary sacrifice, The Salary Calculator

Irish Salary Calculator launched!

by Admin

In response to a few requests, an Irish version of The Salary Calculator has been launched! This new site allows you to perform take-home pay calculations according to the tax laws in Ireland. As well as Irish Income Tax, there is also support for the Universal Social Charge (USC) and Pay-Related Social Insurance (PRSI), and pensions, tax credits and allowances.

Why not take a look at the Irish Salary Calculator and see how your take-home pay might change? You can also perform calculations for an hourly wage, and work out what salary you need to get the take-home pay you desire. Pro-rata calculations are also catered for. You can read about the calculations performed on this page about The Irish Salary Calculator.

At the moment, there aren’t as many options available as there are on the UK Salary Calculator. If you live in Ireland or pay Irish tax and would like new features added to The Salary Calculator, please let me know!

Tags: euro, income tax, Ireland, Irish, Irish Salary Calculator, PRSI, Salary Calculator Ireland, USC

Salary sacrifice and personal pensions

by Admin

For many years, The Salary Calculator has allowed you to enter a percentage of your salary to be deducted as contributions to a pension. However, only employer (or occupational) pensions have been supported. Now, the calculator has been updated to allow you to specify whether your contributions are to an employer pension (as before), a salary sacrifice scheme, or a personal pension.

These three different types of pensions have different regulations applied to them, which means they affect your take-home pay in different ways. Your income tax, National Insurance contributions and even student loan deductions might be different depending on the type of pension scheme you are paying into. More information about the different pension types is on The Salary Calculator “About” page.

Choose the “Pension” tab on The Salary Calculator to see the new options and see how it affects your take-home pay!

Tags: employer, income tax, national insurance, pension, pension scheme, Pensions, personal pension, salary sacrifice