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.
From the tax year 2020/2021 the personal allowance is £12,500, which is the amount you don't pay tax on, unless you go above the £100,000 threshold, where you will 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.
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)
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.
The official calculator on Gov dot uk is not correct, and at the time of writing this has a personal allowance of £12, 509, which goes against their own documentation.