The Salary Calculator

Spring Budget 2017

by Admin

Today, the Chancellor of the Exchequer Philip Hammond will deliver his Spring Budget. It is not expected that there will be any big surprises – no big changes in policy. However, he will be laying the groundwork for a further budget in the Autumn, which is likely to include more significant changes. This is the last Spring Budget, as future budget announcements will take place in the Autumn.

Changes to your take home pay from April 2017 have already been announced and you can compare 2016 and 2017 tax years on The Salary Calculator tax year comparison. The personal allowance (the amount you can earn tax-free) has been increased by £500 to £11,500 and the threshold for higher rate tax has increased by a further £1,500.

Perhaps the biggest change this year is the introduction of different income tax in Scotland – the Scottish Parliament’s budget controls the thresholds and rates for those who live North of the border, and from April 2017 different thresholds apply. The threshold for higher rate tax (£43,000 in the default case) is not increasing in Scotland, whereas in the rest of the UK it will be £45,000. This means that those earning over this threshold will pay more tax if they live in Scotland than if they live elsewhere. You can see this difference in The Salary Calculator if you enter a Scottish tax code or tick the box for Scottish residents (remember to choose the 2017/18 tax year in the drop down box!).

Tags: April 2017, budget, HMRC, income tax, Pay As You Earn, personal allowance, Scotland, Scottish Income Tax, tax rates, The Salary Calculator

April 2017 tax rates and Scottish income tax

by Admin

The Salary Calculator has been updated with the new Income Tax and National Insurance rates which will apply from 6th April 2017. The tax-free personal allowance has been raised by £500 to £11,500, allowing you to take home more of your hard-earned cash without having to pay income tax. Income tax rates have stayed the same, but there is a change to the thresholds between the basic rate (20%) and higher rate (40%) tax bands.

For the first time, from April 2017, income tax will be different if you are resident in Scotland than if you live in the rest of the UK. The Scottish rates of income tax will be set by the Scottish Government rather than by the UK Government in Westminster. For UK income tax, the threshold to 40% tax has gone up to £45,000 (assuming you have the full personal allowance) – but in Scotland, the threshold stays where it was last year at £43,000. Since the increased personal allowance applies both sides of the border, almost everyone will be better off from April 2017 than they were this year – but those earning over £43,000 in Scotland could be as much as £400 worse off over the year compared to if they lived in the rest of the UK. More information about the introduction of the Scottish income tax is available from the Scottish Government.

Head over to The Salary Calculator and choose the 2017/18 tax year to see the difference to you – or try the side-by-side comparison of 2016 and 2017 take home.

Tags: April 2017, HMRC, income tax, national insurance, Pay As You Earn, personal allowance, Scotland, Scottish Income Tax, tax rates, The Salary Calculator

Budget 2016

by Admin

Tomorrow, the Chancellor of the Exchequer will deliver his annual budget to the Houses of Parliament. We have already heard about some possible announcements (such as the introduction of a scheme to help people increase their savings), and we have been told that there will be no changes to pension tax relief (which looked likely, for a while).

From 6th April, the new tax year means changes to tax-free personal allowances, tax thresholds and the like. The Salary Calculator has been updated with the latest values so you can see what your payslip will look like from April onwards. The personal allowance has been increased to £11,000 per year, which will reduce the tax due for most people. There are changes to National Insurance this year, too – since it is no longer possible for a pension to be “contracted-out” (earning a reduction in NI contributions), those of you who had one of these pensions will be paying the full NI contributions from 6th April.

If you would like to see how these changes will affect you, head over to The Salary Calculator to see what difference it will make to your payslip!

Tags: April 2016, budget, income tax, national insurance, Pay As You Earn, pension, Pensions, personal allowance, tax rates, The Salary Calculator

New – see the effects of benefits in kind

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: benefits in kind, childcare vouchers, income tax, Pay As You Earn, personal allowance, tax rates, taxable benefits, 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