UK Income Tax Rules
The I-resign.com salary calculator is based upon the rules that apply for April 2010-2011, set out below, and we also outline some of the changes that will come in next year. You can find all the figures on the HM Revenue and Customs web site). The calculator assumes that you are a regular employee, and not a company director or self-employed and is only valid for the United Kingdom.
Your head will pound if you read all this, and that's why we created the calculator for you!
National Insurance Contributions
National Insurance contributions for employees are calculated on your pay per week. The bands are shown below.
| Pay Per Week | National Insurance Rate |
| First £102 | NIL |
| Salary over £102 and under £817 | 12% |
| Salary over £817 | 2% |
- Example 1: If you earn less than £102 per week,
you pay no NI contributions
- Example 2: If you earn £343 per week, you will
pay 12% of the difference between £343 and £102, £241.
Which means that you will pay £28.92 per week
- Example 3: If you earn £995 per week you will pay £85.8 plus 2% of the £3.56, total of £89.36.
Allowance
| ALLOWANCE | AMOUNT |
| Personal | |
| - Basic | £7475 |
| - Age 65-75 | £9940 |
| - Age 75 and over | £10090 |
| Blind Personal | £1980 |
| Married Couple's
This allowance has been abolished unless one of the couple is 75 or over. |
|
| - Age 75 and over | £2800 - £7295 |
Your Allowance is the amount of money you are allowed to earn without paying income tax.
Your Personal Allowance depends on your age. For example, if you are under 65 and earn £28,400 per annum your allowance is £7475. This means you have to pay income tax on £20925. If you are also blind, you will only pay income tax on £18945.
The elevated allowances for the over-65's are reduced by £1 for every £2 you earn above a limit of 24000, but will never go below the basic allowance of £7475.
From this tax year your personal allowance will be reduced if you earn more than £100,000. For every £2 over this limit your allowance will be reduced by £1. Back at ya, bankers!
If you are married, and either you or your partner are 75 or over you will receive a Married Couple's Allowance. 10% of the allowance is given back to the couple after tax has been paid. The figure of 7295 is the maximum allowance which drops by £1 for every £2 you earn above a limit of 24000, but will never go below the minumum allowance of £2800.
Are you getting all this?
Income Tax Rates
| TAX RATE | INCOME RANGE AFFECTED |
| 10% | This rate is no longer used as of April 2008 |
| 20% | £0-£35000 |
| 40% | £35001-£150000 |
| 50% | £150001 and above |
There are three bands of income tax. Your taxable income is the amount you earn minus your personal allowance (see above).
- The first £35000 of your taxable income is taxed at 20%.
- Between £150000 and £150001 is taxed at 40%.
- In the unlikely event that you let HMRC know that you earn more than £150000 you will pay 50% of that to the government. Nice.
Student Loans
If you have a student loan and earn more than £15000 per year, you'll be paying yet another tax. The repayments are based on a great big table which you can punish yourself by reading on the HMRC web site. We've estimated your repayment in the calculator.