The Salary Calculator

2016 Tax rates available!

by Admin

The Salary Calculator has been updated with the latest tax rates, which take effect from 6th April 2016 – so you can now see how the changes will affect you. Just head over to The Salary Calculator – 2016 take home pay calculator, enter your details and remember to choose the “2016/17” tax year in the drop-down box.

The tax-free personal allowance has been increased by £400, which will reduce the amount of tax most people pay. However, from April 2016 those who have been paying into a pension scheme which is “contracted out” of the additional state pension will find that their National Insurance contributions go up. This is because from April it will no longer be possible to contract out of the pension, so the National Insurance reduction that this gave you no longer applies.

You can try out the 2015 and 2016 take home comparison calculator and see side-by-side how your payslip is likely to change in the new tax year.

Tags: April 2016, budget, HMRC, income tax, national insurance, Pay As You Earn, pension, Pensions, personal allowance, tax rates, The Salary Calculator

New – see the effects of benefits in kind

by Admin

The Salary Calculator has been updated with new options, to help those who receive taxable benefits, or “benefits in kind”, from their employer. As well as paying you your salary, your employer might offer other benefits, such as a company car or private healthcare. They pay for these benefits directly, but you have to pay tax on the value of the benefit (generally, you do not pay National Insurance on these benefits). Sometimes this extra tax is collected through your tax code – it lowers your tax-free personal allowance so that you pay the extra tax automatically. However, you may not know what your tax code will be with this benefit, or your employer might deduct the extra tax directly.

If this is the case, you can now enter the value of the benefit into the “Taxable Benefit” tab on the calculator, choose whether this amount is weekly, monthly or yearly, and then run the calculations to see how it affects your take-home pay. Since the amount of tax you pay will go up when you receive one of these benefits, your take-home pay will go down – but of course you’ll be receiving the benefit that you’ve paid tax on. This information will help you see how much the benefit will actually cost you each month.

To get started, head over to The Salary Calculator.

Tags: benefits in kind, childcare vouchers, income tax, Pay As You Earn, personal allowance, tax rates, taxable benefits, The Salary Calculator

New – see your tax broken down by tax rate

by Admin

I’ve had requests in the past from users of the site saying that it would be useful to see a breakdown of your income tax, showing how much of it was in which tax band. Well, it took a while to get round to it, but now you will see in the results table that if you hover the mouse over the tax deductions, you get a list showing you how much of that tax was at 20%, how much at 40%, etc.

Of course, for a lot of people this will just be at 20%. If you earn a little more, though, you’ll pay some tax at 40% and those who are fortunate enough to earn over £150,000 will be paying some tax at a rate of 45%.

I recognise that there’s a little more work to be done on this – sometimes you might see there’s a discrepancy of 1p in the values (this is just because of rounding up / down and is pretty hard to avoid), and at the moment it’s not possible to see a breakdown of tax when you’ve received a bonus. I know that bonus time is when a lot of people move up into a new tax threshold so I will work to add that in the future, I promise!

If you want to have a go and try it out, here’s where to go: The Salary Calculator

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

General Election Salary Calculator

by Admin

As you may have noticed, there’s a General Election next month and the parties are all out campaigning. Since a major campaign point this time is personal taxation, I thought it would be interesting to compare how the main parties’ policies would affect take-home pay. You can try out the Election Salary Calculator here. This is a simplified version of the normal Salary Calculator, but if you enter your salary and a few other optional extras, it will estimate the differences in deductions for the 5 main national parties.

This is just an estimate, and not all of the details are available yet – I will update the calculator with more information as the parties provide it. I hope you find it interesting! Details of the changes are described below the results table. The BBC has a very good article explaining the parties’ positions on taxation and other policy areas.

Tags: 2015, election, income tax, national insurance, Pay As You Earn, personal allowance, tax rates, The Salary Calculator

Budget 2015

by Admin

The Chancellor gave his pre-election budget earlier today – announcing his plans for forthcoming years. With an election just around the corner, this budget is even more of a sales pitch than usual – most of the changes he announced would only come to pass if the Conservatives were to be in government for the next term.

From a personal taxation point of view, the most significant announcement was arguably the plan for the first £1,000 of interest earned on savings to be tax free, effective April 2016. This will allow almost everyone to pay no taxes on their savings interest (those with high incomes from elsewhere will have this £1,000 limit reduced, possibly to zero), but the amount saved each year for most people is likely to be only a few pounds – and at most £200. There is also a plan to raise the threshold for the higher rate tax (the point at which income tax increases from 20% to 40%) ahead of inflation – an effective tax break for those on good middle-class incomes.

The Salary Calculator has already been updated with the tax rates which take effect from April 2015 so you can see how your pay packet will change next month. You can also compare 2014 and 2015 tax rates side-by-side to see where the differences come in.

Tags: 2015, April 2015, budget, Economy, income tax, national insurance, Pay As You Earn, tax rates, The Salary Calculator