The Salary Calculator

Childcare voucher petition

by Admin

Since my blog post about childcare vouchers earlier this week, I’ve heard from the people at Busy Bees Benefits, one of the companies that offer childcare voucher schemes to employers, like those I described in my blog post. They told me about a petition they have launched to increase the value of vouchers that could be received by parents tax-free.

As I described in my previous post, the value of vouchers that can be received tax-free is currently £2,915 per year, or £55 per week. This limit has been the same since 2006, but many parents are finding that the cost of childcare has increased in the years since then so the vouchers do not cover as much of their childcare fees. Busy Bees Benefits are trying to get this limit raised to £75 per week (£3,975 per year), and the first step is to get 100,000 signatures on the petition so the proposal can be debated in Parliament. Increasing the tax-free limit would allow parents to sacrifice more of their salary in exchange for vouchers, therefore saving more tax and National Insurance.

More details are available on the Busy Bees Benefits childcare voucher petition page, where you can learn more and sign the petition if you want to back the change!

Tags: childcare vouchers, income tax, national insurance, Pay As You Earn, The Salary Calculator

Childcare Vouchers added!

by Admin

The Salary Calculator has been updated with a new option for Childcare Vouchers. Some employers offer employees the opportunity to have some of their pay in the form of vouchers which can be exchanged with accredited childcare providers instead of cash. These vouchers can be taken tax-free, saving the employee money.

Childcare vouchers are subtracted from your salary before tax and National Insurance, like pension contributions. However, there is a limit to the amount that can be taken tax-free each year – for the current tax year, this amount is £2,915. You can receive childcare vouchers above this amount, but you will not get the tax benefits. If you signed up for the voucher scheme before 6th April 2011, this limit applies no matter how much you earn. However, if you joined the scheme after this date and pay tax above the 20% Basic Rate, the amount you can receive tax-free is reduced. For those paying 40% tax (typically earning £42,475 or more), the tax-free allowance for childcare vouchers is £1,484 – and for those paying 50% tax (earning over £150,000) it is just £1,166.

To see how childcare vouchers can affect your take-home pay, head over to The Salary Calculator and enter your salary, along with the value of vouchers you receive each month. If you joined the scheme before 6th April 2011, tick the box to this effect. Enter the rest of your details and click Go! to see the results.

Tags: April 2011, childcare vouchers, income tax, national insurance, Pay As You Earn, pension, Pensions, The Salary Calculator

Free Android app for The Salary Calculator

by Admin

A brand new app has just been launched on the Android Marketplace which allows you to use The Salary Calculator without being online. The Salary Calculator app allows you to perform salary calculations as you would on the website, but installed on your Android smartphone.

The app supports both annual salary and hourly wage calculations, including income tax, National Insurance and student loan repayments. You can also include overtime, pension contributions and tax codes, and view the results annually, monthly or weekly. It’s up to date with April 2012 data but you can choose previous tax years if you want to compare older rates. What’s more, the app is completely free to use!

Click here to get The Salary Calculator Android app.

Tags: android, app, income tax, mobile, national insurance, personal allowance, The Salary Calculator

Student Loan repayment threshold

by Admin

Those of you who are repaying your Student Loan through PAYE might have noticed that this month your student loan deduction is a little lower than usual (£5-£6 lower). This is because the annual threshold for student loan repayments increased in April from £15,000 to £15,795.

Income-contingent Student Loans are repaid from the April after you complete your course, at a rate of 9% on any gross income above this threshold. This is similar to the way income tax is calculated – i.e. a percentage of any income above a certain “free” allowance. However, while the tax-free allowance usually increases by a small amount each year, the student loan repayment threshold has been steady at £15,000 since April 2005 – before that, it was £10,000. If you’ve been paying off your student loan for a few years now, you may be surprised to see this change. More information is available from the Student Loan Repayment site. The Salary Calculator is up-to-date with this change to the repayment threshold.

If you are repaying your student loan and you think you might be close to paying it off, this earlier blog post about Student Loan over-repayment may be of interest to you.

Tags: April 2012, debt, Loans, Pay As You Earn, repayment, student loan company, student loans, The Salary Calculator

Pro-rata Salary Calculator added

by Admin

For a very long time, people have been asking me to add a pro-rata tax calculator to The Salary Calculator – I have finally created it and added it to the site. As I have mentioned in an earlier post, pro-rata salary is normally calculated quite easily. For reduced hours, most employers will multiply the full-time salary by the reduced number of hours divided by the full-time hours.

For example, if the full-time salary is £20,000 per year for 37.5 hours’ work per week, the pro-rata salary based on a 18-hour working week would be:

£20,000 x (18 / 37.5) = £9,600

Income tax, National Insurance and other deductions are then calculated based on this new salary. To use this new tool, you just need to enter the full-time salary, the full-time hours, and the new hours that the pro-rata salary is to be calculated from. To check it out for yourself, get started with the pro rata Salary Calculator.

Tags: income tax, national insurance, Pay As You Earn, pro-rata, The Salary Calculator