1. UK Tax System Overview

The UK tax year runs from April 6 to April 5 the following year. For the 2024-25 tax year, the calculator considers Income Tax, National Insurance contributions, and optional student loan repayments based on your salary and circumstances.

2. How Tax is Calculated

Income tax is calculated using these bands for 2024-25:

Note: The personal allowance is reduced by £1 for every £2 earned over £100,000.

3. National Insurance Explained

Details: National Insurance (NI) is calculated separately from income tax:

• Primary Threshold: £12,570 (0%)
• £12,571 - £50,270: 8%
• Above £50,270: 2%

4. Using the Calculator

Tips: Enter your gross annual salary before tax. Include pension contributions if applicable (these are tax-free). Select your student loan plan if you have one.

5. Frequently Asked Questions (FAQ)

Q1: Is pension contribution tax-free?
A: Yes, pension contributions are deducted before calculating tax and NI, up to annual allowance limits.

Q2: What's the difference between student loan plans?
A: Plan 1 (pre-2012), Plan 2 (post-2012), and Plan 4 (Scotland) have different repayment thresholds.

Q3: Are bonuses included in this calculation?
A: No, this calculates based on annual salary only. Bonuses are taxed differently.

Q4: What about other deductions?
A: This calculator doesn't account for benefits in kind, company cars, or other deductions.

Q5: How accurate is this calculator?
A: It provides estimates based on standard rates. Your actual deductions may vary based on your specific circumstances.