The Salary Calculator

Pension contributions on The Salary Calculator

by Admin

As I wrote a short while ago, for a long time people have been emailing and requesting that The Salary Calculator offer support for pension contributions. My excuse had always been that pension contributions aren’t as simple as they might seem, but now I have finally tackled the problem.

Deductions made at source for a company pension or other pension scheme are typically a percentage of your salary, and any contributions you make to the pension are not taxed. The complication comes when employers calculate what is called “pensionable pay” – it is a percentage of this that is deducted each paycheck. As you can see in this related article about pensions, this is not necessarily just your annual salary – each employer calculates it differently.

Therefore, the pension deductions which have been added to The Salary Calculator are an estimate. They may match exactly what your employer does, but probably they will not. However, this is an improvement to the calculator in that it can give you a better indication of what your take home pay will be after pension contributions than it could before.

The approach I’ve taken is to take the percentage you enter into the pension field and deduct that percentage from the standard annual salary (i.e. not including any overtime). Therefore, the calculator is assuming that your pensionable pay is the same as your annual salary. If your employer calculates it differently I’m afraid that this estimate won’t be accurate, but it should give you a good indication. Sorry I couldn’t make it more accurate! Get started on The Salary Calculator with pension contributions.

Tags: income tax, Pay As You Earn, pension, Pensions, tax rates, The Salary Calculator

Plans for The Salary Calculator to include pensions

by Admin

Almost since The Salary Calculator was first created, people have been asking for it to include pension contributions. Pension contributions are typically a percentage of your salary each month, and are deducted before tax. I’m afraid pensions have not yet been added to the website but I do plan to add them in the near future.

When I first tried to add them I found that the calculation was not as simple as I expected – the more I investigated, the more unpredictable it seemed to be. However, looking back, I think that a more simple approach can be taken to include pension contributions in the calculation, and help you see a more accurate calculation of the take home pay.

I’ll be working on this in the next few weeks and months, and if you check back on the blog regularly you’ll be the first to know when it’s released!

Tags: income tax, Pay As You Earn, Pensions, The Salary Calculator