Calculating tax

[PaulStat]

So I know I can go to the various online tax calculator which do it for me (but never quite match up to what I see on my payslips?) but I'd like to try and work it out myself. So I'm getting myself in a bit of a muddle as I thought I was doing it right but can't match up to my payslip.

So for example let's say my gross salary was 60k, and I did a 10% salary sacrifice for pension. I have it like so

Take off pension sacrifice
60000 - 6000 = 56000

Take off personal allowance
56000 - 12500 = 43500

Tax due at 20% for 12 months
43500 * 0.2 = 8700 i.e. £725 per month

Tax due at 40% for 12 months
56000 - 50000 = 6000
6000 * 0.4 = 2400 i.e. £200 per month

Is the above example right?

 

[Entropy]

You would pay 20% rate on 37500 in this example as you pay 40% on the sum above 50k,

 

[weringo]

60,000 - 6,000 isn't 56,000 so that was a bad start

Your 60,000 breaks down as follows:
6,000 pension (non-taxable)
12,500 personal allowance 0%
(50,000 - 12,500) at the basic rate 20% = 7,500
(60,000 - 6,000 - 50,000) at the higher rate 40% = 1,600

Total income tax 9,100

Then you have NIC on top assuming these are employment earnings

 

[Psycho Sonny]

Your calculations are wrong.

I think you are messing up because you are taking away your personal allowance.

If you earned say £100k.

You don't take away the personal allowance then use £90k as the figure for income.

You use £100k and then put it into each tax bracket then take away the allowance from the lowest bracket.

 

[Sui]

Yea what they said, you were double taxing yourself there partly.

 

[PaulStat]

60,000 - 6,000 isn't 56,000 so that was a bad start

Your 60,000 breaks down as follows:
6,000 pension (non-taxable)
12,500 personal allowance 0%
(50,000 - 12,500) at the basic rate 20% = 7,500
(60,000 - 6,000 - 50,000) at the higher rate 40% = 1,600

Total income tax 9,100

Then you have NIC on top assuming these are employment earnings

Errr woops lol, thanks

 

[PaulStat]

OK next question then why does changing the tax code affect the upper bracket tax value but not the lower?