Income Tax Calculator

Use this calculator to work out how much money you can take home from your salary, after deductions have been accounted for. It takes into account the following: National Insurance, Personal allowance, and Income Tax, from a PAYE point of view, for England and Wales.

Personal allowances

Take for example the tax year 2020/2021 the personal allowance was £12,500, which was the amount you didn’t pay tax on, unless you went above the £100,000 threshold, where you would be taxed an additional £1 for every £2 of income. This information relates to people of a certain age, born after 6th April 1948 only.

Income tax rates and bands

Tax is paid on the remainder after personal allowance has been deducted.

Tax codes used for calculating salary

The Salary calculator accepts the following tax codes:

LettersWhat they mean

LYou’re entitled to the standard tax-free Personal Allowance, also the default

MYou’ve received a transfer of 10% of your partner’s Personal Allowance

NYou’ve transferred 10% of your Personal Allowance to your partner

0TYour Personal Allowance has been used up, or you’ve started a new job and your employer does not have the details they need to give you a tax code

D0All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)

D1All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)

National insurance contributions

The calculator accounts for class 1 contributions only at this time. The example is as follows:

If you’re in category A and you earn £1,000 in a week you’ll pay:

  • Nothing on the first £183
  • 12% (£93.48) on your earnings between £183.01 and £962
  • 2% (£0.76) on the remaining earnings above £962

This means your National Insurance payment will be £94.24 for the week.

How to use the income tax calculator

It’s designed to be very straight forward, simply enter the amount you get paid (gross salary), and then select the frequency, e.g. Annually, Monthly or Weekly, once you have chosen simply press the button to calculate and hey presto, the results will include the following (where applicable):

  • Tax-free allowance
  • National insurance
  • Income tax (basic rate)
  • Income tax (higher rate)
  • Income tax (additional rate)

Additional information

The results are only meant as a guide, they are not a replacement for the workings of an accountant, however the formula is based on the latest Government guidance. Feel free to use the results to make estimations only, the results are no replacement for your own due diligence.

One of the things I found most confusing when creating the calculator was following all the different rules that the government has, for instance, the rule around personal allowances and national insurance are totally different.