Pay As You Earn

New! Postgraduate Loan Repayment

Starting from April 2019, repayment of new Postgraduate Student Loans will be done through Pay As You Earn (PAYE). As The Salary Calculator has just been updated with the April 2019 figures, repayment of postgraduate loans has been added so, if this applies to you, you can see what effect this will have on your take home pay.

These loan repayments are in addition to Plan 1 and Plan 2 student loan repayments, which you may have from undergraduate courses you have studied. Postgraduate loan repayments are calculated as 6% of gross annual earnings over £21,000. More information is available from the Student Loans Company.

Also, so you can see how your loans are being repaid, if you select more than one loan type on The Salary Calculator you will be able to click for a breakdown of how the repayments are distributed to your different student loans.

Because this only comes in to effect from April 2019, in order to see the effect of postgraduate loan repayments you will need to select “2019/20” from the Tax Year drop-down. Head over to The Salary Calculator to check it out!

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None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

April 2019 tax rates

The Salary Calculator has been updated with the tax rates which will take effect from 6th April 2019. There is a significant increase in the tax-free Personal Allowance from £11,850 to £12,500 per year, and outside of Scotland the threshold from 20% basic rate to 40% higher rate income tax has been increased to £50,000. Scottish tax thresholds are different from the rest of the UK, current information suggests that they will not increase as much as the UK rates will.

There have also been increases in the thresholds for Plan 1 and Plan 2 Student Loan repayments, so those paying off their loans will find their repayments lowered in the new year.

You can try out the April 2019 tax rates for yourself by choosing “2019 / 20” in the Tax Year drop-down on The Salary Calculator. You can also see a side-by-side comparison of 2018 and 2019 with the 2018 and 2019 income tax comparison page.

The calculator has been updated with the best information currently available – if any of the details change before the start of the tax year the calculator will be updated to reflect those changes.

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Auto-enrolment pensions

I’ve been dragging my feet on this one (sorry), but I have finally added an option to the Salary Calculator for auto-enrolment pensions, which employers are obliged to offer to eligible employees if there is not already an employer pension scheme. These pensions involve a percentage being deducted from your pay, but only on what you earn over a certain threshold (£6,032 for the tax year from April 2018). There is also an upper threshold, above which deductions are not taken – £46,350 for the April 2018 tax year.

To use the new option, enter your details in to The Salary Calculator. On the Pension tab, select the “Auto-enrolment” option and enter the percentage of your salary that you will be contributing. Click “Go!” to see the results.

Auto-enrolment pensions also require your employer to contribute to your pension, but I have not yet added this to The Salary Calculator – so enter only the percentage that you will be contributing (your employer’s contribution does not affect your take-home pay).

From 6th April 2018 the minimum amount employees are required to pay into their auto-enrolment pension increases from 1% of their pay to 3% (and from April 2019 it increases further to 5%). This can make quite a difference to your take-home pay – try it out on the Salary Calculator and see what a difference it makes!

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April 2018 tax rates

The Salary Calculator has been updated, and the new tax information which takes effect from 6th April 2018 has been applied. The personal allowance has been increased from £11,500 to £11,850, meaning you can earn an extra £350 tax-free per year. The thresholds between tax bands have also been increased.

In Scotland, new tax bands have been introduced, making income tax calculations quite different from in the rest of the UK. There are 5 tax rates, 19%, 20%, 21%, 41% and 46%, compared to just three in the rest of the UK (20%, 40% and 45%). The result of this difference is that lower earners North of the border can save as much as £20 per year compared to the rest of the UK, but with higher earners potentially paying quite a bit more in Scotland than they would if they were based elsewhere in the UK. The point at which Scottish earners go from paying less to paying more tax is a salary of about £26,000.

You can try out the April 2018 tax rates for yourself by choosing “2018 / 19” in the Tax Year drop-down on The Salary Calculator. You can also see a side-by-side comparison of 2017 and 2018 with the 2017 and 2018 income tax comparison page.

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New – Election Calculator 2017

With a General Election on the way, The Salary Calculator’s Election Calculator has been updated with the latest campaign proposals from the main parties. This allows you to see an estimate of how the different parties’ policies might affect you if they come to power. Right now, only the 3 parties Conservative, Labour and Liberal Democrats have produced their manifestos with details of their taxation plans. When other parties such as The Green Party and UKIP reveal their plans, the calculator will be updated.

As explained on the Election Calculator itself, this is a simplified version of The Salary Calculator, and some estimates and assumptions have had to be made. Also, of course, income tax and National Insurance are only some of the ways that governments can raise revenue, and other policy proposals may affect your financial situation. With that in mind, check out the 2017 Election Calculator.

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