Payroll Tax Calculator

A comprehensive payroll tax calculator factors in all the essential elements of UK payroll, including the current tax year’s rates and thresholds, tax codes, and various salary sacrifice arrangements. For employees, it provides clarity on how much of their gross salary will actually reach their bank account after all deductions. For employers, it helps calculate not just employee deductions but also employer National Insurance contributions and pension obligations, making it an invaluable tool for budgeting and financial planning.

The UK payroll system involves multiple layers of calculations that can significantly impact take-home pay. For the 2023/24 tax year, income tax starts at 20% for earnings between £12,571 and £50,270, rising to 40% for earnings between £50,271 and £125,140, and 45% for earnings above £125,140. Employee National Insurance contributions are calculated at 12% on weekly earnings between £242 and £967, and 2% on earnings above £967. Additionally, workplace pension schemes typically require both employee and employer contributions, with minimum employer contributions set at 3% of qualifying earnings. Using a payroll calculator helps navigate these complexities and ensures compliance with UK employment law while providing accurate figures for both monthly and annual planning purposes. For instance, someone earning £35,000 annually needs to account for income tax, National Insurance, and pension contributions to understand their actual monthly take-home pay, while their employer needs to calculate their total cost of employment including employer’s NI and pension contributions.