The Salary Calculator

Receiving a pension AND employment income

by Admin

The Salary Calculator has had the Two Jobs calculator for a little over a year now. I have had a couple of people contact me and say that they haven’t been able to use it for their situation, which is that they are receiving one income as a pension but they have a second income from a job. The pension doesn’t have National Insurance deducted from it but the job does, and it wasn’t possible to reflect this in the calculator. However, this oversight has now been fixed!

On the Two Jobs calculator, the Additional Options tab now has two extra tick-boxes which you can use to indicate that either the first or second job is a pension (or indeed that they are both pensions). The calculator will then not deduct NI from the job that you say is actually a pension. On all other calculators, where you are only dealing with one income, you can just tick the “I do not pay National Insurance” box if this actually a pension.

Tags: Jobs, national insurance, Pay As You Earn, pension, Pensions, 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 option – reduced pay

by Admin

With the coronavirus outbreak affecting businesses around the country, a number of employers have had to make the decision to ask staff not to come in to work. The government announced last week that, to encourage employers not to lay staff off, they will pay up to 80% (to a maximum £2,500 per month) of staff members’ salaries if they keep them on the payroll. As well as trying to ensure that employees still receive some pay, the plan is to keep the workers available so the economy is well placed to start up again once the virus threat is reduced.

I have added an option to the existing Pro-Rata Calculator which allows you to enter a percentage of salary instead of reduced hours. Some employers will continue to pay their employees the full amount during the pandemic, others may only be able to pay what they are receiving from the government. And of course, for other reasons you might be receiving a percentage reduction in salary. If this applies to you, enter your full-time salary and full-time hours, then enter the percentage of your salary that you will be receiving. With tax and pension deductions etc taken into account, you might find that the reduction is not quite as bad as you thought. For example, someone on the UK median full-time salary (which is about £30,000) normally takes home £1,915 per month after tax and 5% auto-enrolment pension contributions. On 80% salary, they would take home £1,595, which is a significant drop but still just over 83% of normal. Other deductions like Student Loan repayment could make the overall reduction to a slightly more manageable 85%.

Also of interest might be the new Sick Pay Calculator, which I launched last week to help people who have had to take a short period of time off on reduced pay.

Tags: coronavirus, covid-19, Economy, furlough, HMRC, income tax, layoff, national insurance, Pay As You Earn, pension, pro-rata, reduced pay, student loans, The Salary Calculator, unemployment

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

New! Two Jobs Salary Calculator

by Admin

I have finally been able to deliver something that has been on my “to-do” list for several years – a salary calculator for when you have two jobs at the same time. If you are considering taking on a second job to help make ends meet, or if you have two part-time jobs rather than one full-time job, it isn’t easy to work out what your take-home pay will be. If you’d like to try it out and see what a difference an extra job could make, head over to the Two Jobs Salary Calculator.

All the usual options are there, such as pension contributions, bonuses and overtime, to help you see all the details in one place. You can use the calculator without a tax code, or with a single tax code for both jobs, or with individual tax codes for each job if you have been given them by HMRC.

It can be quite complicated to work out the tax and other deductions for those who are working two jobs, so I hope this will be useful to some of you. It was also quite difficult to find a way to display all the options (like pension contributions from both jobs) without making it too hard to use. I hope I have succeeded, I look forward to hearing from people who have used it.

Tags: careers, HMRC, income tax, Jobs, national insurance, Pay As You Earn, pension, Pensions, second job, student loans, tax rates, The Salary Calculator, two jobs