The Salary Calculator
New! Enhanced pension options
I have been asked a number of times to add some options to the Pension calculations, and today I have done just that.
Auto-enrolment pensions have specific rules about how to calculate the amount which should be contributed – overtime and bonuses are included, for example, but the contribution is only on a percentage of the “Qualifying Earnings”. Qualifying Earnings are your employment income between a lower and upper threshold, which from 6th April 2019 will be £6,136 and £50,000 respectively.
Other pension types have more flexibility, which is why the Salary Calculator has been updated, and if you select an Employer, Salary Sacrifice or Personal pension, you can now choose whether to have contributions based on your whole salary or on your qualifying earnings, and whether or not to include overtime and bonuses in the calculations.
Why not head over to The Salary Calculator, click on the Pension tab and see whether these options might affect your take-home pay?
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.
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!
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.
Redesign of The Salary Calculator
The Salary Calculator has been around since 2005 and although many new options have been added since then, the site has never had a complete redesign – until now. Working with designer Dan Gallagher-Cowley, the site has been given a refresh and a much more modern look.
All the same options are there for you to personalise your tax calculations, but laid out in a way which we hope will be easier to use and less daunting for visitors who are unfamiliar with all the terminology. One big change is that you enter all of your details first, and then see the results on the next page (instead of the results being side-by-side with the options) – once you get the results, you can scroll down to modify the options and re-calculate if you wish. I know a lot of people liked the side-by-side layout, but unfortunately I was running out of space for options and this new design gives much more space to add new features. For example, it has now been possible to add auto-enrolment pensions.
The new design also works on mobile devices, so I have removed the dedicated mobile version of the site (which only had a couple of pages, and was missing some options) – mobile users can now use every page of the site and will get new features as soon as they are available on the main site.
I’m going to keep experimenting with the design and continue to make changes to try to optimise the experience of users on the site. I know there will be some who preferred the old version of the site but I hope most of you will find the new site easier to use! Try out the new-look Salary Calculator.
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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