Use take-home pay calculator to get an exact income tax, national insurance, pension contributions and pay tax. Our tax calculator shows how much income tax you will pay from your salary. Just enter your tax code and get a complete salary calculator online.
UK Tax Calculator
How to Use Income Tax Calculator?
Use this guide to utilize the take-home pay calculator on your device.
1- Enter Your Gross Salary:
Enter your gross salary or yearly salary in the salary box. You can check your employment contract if you do not know what your gross salary is.
2- Provide your Tax Code:
The next step is to enter your tax code inside the tax code box. If you need help determining what your tax code is then please check your payslips, HMRC, or P45 online portal.
3- Choose National Insurance:
This is the optional to choose your national insurance option. If you do not pay national insurance then simply leave it. To get your national insurance, you need to check your salary slip. If you are not on national insurance like you are not on State Pension Age then leave it as it is.
4- Pick Your Pension Contributions:
This option is based on the pension scheme of your employer. If you have signed the pension contributions then choose the percentage for your pension contribution.
5- Calculate Your Take Home Pay Tax:
Choose the tax year like 2024 and simply get your take-home pay tax using this salary calculator. You will get all the details like national insurance contributions, taxable benefits, and your personal allowance.
How to Determine Pension Contributions In Take-Home Pay Tax?
To determine pension contributions in the take-home pay tax calculation, you typically need to know the following:
- Pension Scheme Type: Your employer may offer a workplace pension, which could be a defined benefit or defined contribution plan. The type of scheme determines how the contributions are calculated.
- Contribution Rates: Most schemes require both the employee and the employer to make contributions. The contribution rates can be a fixed percentage of your salary or a specific amount.
- Salary Sacrifice: Some employers offer a salary sacrifice arrangement, where a portion of your gross salary is paid into your pension before income tax is calculated. This can reduce your overall tax liability.
- Pensionable Earnings: The amount of your salary that is considered for contributions may differ from your gross salary. Some pension schemes use basic salary, while others may include bonuses or other allowances.
To accurately determine your pension contributions, you need to gather information specific to your scheme, such as:
- The type of scheme (defined benefit or defined contribution)
- Employee and employer contribution rates
- Whether a salary sacrifice arrangement is in place
- The definition of pensionable earnings used by the scheme
What is Income Tax and National Insurance?
Here is the breakdown of the national insurance tax:
Purpose
National Insurance (NI) contributions fund certain state benefits, such as the State Pension, Maternity Allowance, and certain benefits for the unemployed or sick.
Rates
There are different National Insurance rates for employees and employers. For an employee, the rates depend on their earnings level and employment status (employed or self-employed).
Thresholds
There are thresholds below which no National Insurance needs to be paid. For the 2023/24 tax year date, the Primary Threshold for an employee to contribute is £190 per week.
Calculation
National Insurance is calculated as a percentage of earnings above the Primary Threshold, up to an Upper Earnings Limit.
Income Tax
Income tax is the form of tax that the government of the United Kingdom collects from employees and business persons. This is a mandatory tax for all citizens who are earning a certain income threshold.
Income tax is not national insurance. Income tax and national insurance are two different taxes.
For employees, income tax is deducted from your pay automatically by your employer through the PAYE (Pay As You Earn) system. The amount you pay depends on your annual salary and tax rate. If you get a pay rise, your income tax will increase because you’re earning more.
Self-employed people have to keep track of their income and expenses themselves and pay income tax through self-assessment. This will be based on their normal hourly rate and hours worked, or their overall profits if running a business.
The income tax rates in the UK are progressive, meaning the more you earn, the higher the tax rate. There are different tax bands that apply once your income goes over certain thresholds. The government uses the income tax collected to fund public services like the NHS, education, defence, and more.
Why It Is Important to Use Take Home Pay Calculator?
It is very beneficial to use the take-home pay calculator or salary calculator to determine your net salary after all the taxes and contributions. This will allow you to track your expenses, help you to make major financial decisions, and take calculations.
- Take Better Financial Decisions: You will get the ability to make informed financial decisions.
- Know Your Deducted Tax: One should be aware of all the tax and other deductions he is paying from his salary. This home salaries calculator will allow you to track everything easily.
- Salary Negotiation: Understanding your take-home pay is crucial, especially when negotiating a new job offer or a salary increase. With the information provided by the calculator, you can have a clearer picture of your disposable income, allowing you to negotiate more confidently and effectively.
How to Calculate Net Salary?
Here is the simple formula to calculate net salary:
Net Salary = Gross Pay – Income Tax & Other Deductions (NI, Pensions, Student Loan etc)
Use this formula to simply find out what will you be paid by your employer after all the difference.
F.A.Q
When will I be eligible for income tax in the UK?
If you are earning more than £12,570 then you need to pay the tax. You will get an auto-enrolment in tax collection if you are earning more than this money.
What is the NI category?
If you are paying national insurance then you fall into the NI category.
What is the student loan deduction in my income tax?
If you are a beneficiary of a student loan program then your income will be deducted for this loan payment. This is a repaid of your student loan payments.
Note: This website and tax calculator are only for illustrative purposes to help and educate UK citizens. We do not take any responsibility for the accuracy of any deducted amount from your income tax. Kindly consult with a qualified specialist for making any financial decisions.