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# £45,440.00 Tax Calculation for 2017/18 Tax Year

The following calculations are used to provide an insight into the deductions and tax thresholds, rates and application when computing your income. These calculations are purely for example and reference, including default settings and allowances. You can produce a bespoke PAYE / Dividend / Pension Calculation using the Calculator here

£44,985.60 Income Tax Calculations for 2017
YearlyMonthly4 Weekly2 WeeklyWeeklyDailyHourly%1
Gross Income45,440.003,786.673,495.381,747.69873.85179.6024.97100.00%
Tax Free Personal Allowance11,500.00958.33884.62442.31221.1545.456.3225.31%
Company Pension: Employee454.4037.8734.9517.488.741.800.251.00%
Company Pension: Employer454.4037.8734.9517.488.741.800.251.00%
Taxable Pay33,485.602,790.472,575.821,287.91643.95132.3518.4073.69%
Tax Due6,697.12558.09515.16257.58128.7926.473.6814.74%
National Insurance4,418.59368.22339.89169.9584.9717.462.439.72%
Total Deductions11,570.11964.18890.01445.00222.5045.736.3625.46%
Net Pay33,869.892,822.492,605.381,302.69651.34133.8718.6174.54%
Employers NIC Contribution5,081.38423.45390.88195.4497.7220.082.7911.18%
Salary Package [Cost of Employee]50,975.784,247.983,921.211,960.61980.30201.4928.01112.18%

1 Percentage expressed in relation to Gross Income [£44,985.60].

2 Adjusted Gross Income allows for tax free deductions including Salary Sacrifice schemes.

## How to calculate £45,440.00 salary

Payroll deductions include 3 key elements, Pay As You Earn (PAYE), National Insurance Contributions (NIC's) and Pension Deductions.

We will examine each of these key payroll deductions in turn. Note that these are purely for example, to produce more accurate calculations to reflect your own circumstances please use the tax calculator here and edit the details as required, you can also choose different tax outputs and allow for dividends etc.

### How to calculate PAYE deductions on an annual salary of £45,440.00

PAYE is calculated using separate tax rates and thresholds, in simple terms the more your earn, the higher the rate of tax applied.

#### How we calculated your PAYE Income Tax

Your taxable income exceeds the starting rate income tax threshold but is less than the basic rate threshold so your PAYE calculation includes the Basic PAYE rate:

 £33,485.60 Income taxable at Basic rate in 2017 x 20% Basic rate Income tax rate in 2017 = £6,697.12 PAYE due at Basic rate in 2017
 = £0.00 PAYE due at Additional rate in 2017 = £0.00 PAYE due at Higher rate in 2017 = £6,697.12 PAYE due at Basic rate in 2017 = £6,697.12 Total PAYE due in 2017

There are a number of ways you can reduce the amount of PAYE tax you pay, you may find our 10 Tax Saving Tips supports you with reducing yorur tax bill. We also suggest reviwing the following tax guides: P60 Explained, review our 60 second P60 checklist or look at what to check on your P60 when looking to reclaim overpaid tax.

### How to calculate National Insurance Contributions (NIC's) on an annual salary of £45,440.00

#### How we calculated your National Insurance Contributions

National Insurance Contributions (NICs) in 2017 are payable by all individuals who:

• Earn more than £157.00 per week
• Are aged between 16 and 65 years of age.
• Are self-employed and making annual profits exceeding of £6,025.00
• Fall outside the standard contributing rules and want to make voluntary National Insurance Contributions to cover gaps / shortfalls in your contributions.

National Insurance Contributions (NICs) are composed of two elements, the amount contributed by you, the employee and the amount contributed by your employer. This are referred to as:

• Primary Threshold: The category used for associating NICs rates and NICs earning thresholds to an EMPLOYEE
• Secondary Threshold: The category used for associating NICs rates and NICs earning thresholds to an EMPLOYER. Read more about Employers National Insurance Contributions,

National Insurance Contributions (NICs) are calculated using a combination of:

• Earning thresholds: How much you earn changes the rate at which you pay NICs. Earning which fall within each threshold are 'Earnings subject to NICs'
• Percentage Rates: How much of the 'Earnings subject to NICs' is deducted
##### National Insurance Class for NIC Calculation

Based on the information provided (you can change the settings in the advanced calculator as required) we have calculated your National Insurance Contributions using:

Class 1 Employees earning more than £157.00 a week and under State Pension age - they're automatically deducted by your employer

Class 1A or 1B Employers pay these directly on their employee's expenses or benefits

 £0.00 [ Below LEL: 0% ] Weekly Lower Earnings Limit (LEL) (52 x £113.00 ) + £0.00 [ LEL - PT: 0% ] Weekly Primary Threshold (PT) (52 x £157.00) + £4,418.59 [ PT- UEL: 12% ] Weekly Upper Earnings Limit (UEL) (52 x £866.00) + £0.00 [ Above UEL: 2% ] Above Weekly Upper Earnings Limit (UEL) (52 x £866.00) = £4,418.59 Total National Insurance Contributions in 2017
 £44,985.60 Adjusted income (allowing for Salary Sacrifice and Pensions) £45,032.00 Weekly Primary Threshold (PT) (52 x £866.00) - £8,164.00 Weekly Lower Earnings Limit (LEL) (52 x £157.00) = £36,821.60 Amount subject to Primary Threshold National Insurance Contributions in 2017 = (lesser of £36,821.60 and £45,032.00) x 12% Employee's Class 1 contribution rate between Primary Threshold and Upper Secondary Threshold for under 21s = £4,418.59 Your employee Primary Threshold NICS in 2017
 £44,985.60 Adjusted income (allowing for Salary Sacrifice and Pensions) - £8,164.00 Weekly Secondary Threshold (ST) (52 x £157.00) = £36,821.60 Amount subject to Secondary Threshold National Insurance Contributions in 2017 x 13.8% Employer's Class 1 contribution rate above Secondary Threshold = £5,081.38 Your employer NICS in 20171 1 Employers can claim up to £3,000.00 off the NIC bill in 2017 using the Employment Allowance scheme. You must have more than one employee and pay class 1 National Insurance Contributions. You can also claim Employment Allowance if you employ a care or support worker. The Employment allowance is not shown in this illustration due to the variance of amounts dependant on number of employees / means of claiming the allowance.

### How to calculate Company Pension Contributions on an annual salary of £45,440.00

Although participating in a Company Pension is not compulsory (yet! It does seem that's the way the governemnt is going), Company Pensions are increasingly common due to the UK Government drive to increase personal pension holdings.

The good news is that your contributions to a Company Pension are Tax Free and attract mandatory contributions from your employer (currently 1% of your salary but rising to a minimum of 3% of your salary from 6th April 2019. Whilst this initiative has placed an increased financial pressure on employers, particulalry small businesses, it has facilitated a superb oppertunity for employees, assuming you can manage your day-to-day accounts without the monies contributed.

#### How we calculated your company pension

Company pensions are composed of two seperate elements, these are employee pension contributions (deducted from your salary) and employer pension contributions (paid in addition to your salary). Company pensions are an excellent means of Tax Avoidance and also provide a higher overall salary package when you factor in employer contributions.

 1% Percentage contribution from your annual gross salary x £45,440.00 Annual Gross Salary £454.40 Your employee pension contributions in 2017
 1% Percentage contribution based on your annual gross salary £45,440.00 Annual Gross Salary £454.40 Your employer pension contributions in 2017

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### How Much Mortgage can you afford when earning £45,440.00?

Looking for a great deal on your mortgage? Did you know that based on an annual salary of £ 45,440.00 that you could borrow between £136,320.00 and £204,480.00. The amount you can borrow for a mortgage depends on your annual earnings, regular outgoings, credit score, other financial commitments and the mortgage provider you choose. Different mortgage providers use different rates and lend different amounts dependent on your circumstances. Mortgage Repayment Calculator.

### Tax Saving Tips

Do you want to pay less tax legally? Are you aware of what you can do to make the most of your earnings rather than pumping them into the treasury? Out Top 10 Tax Savings Tips packed full of useful tips that provide example of how to legally pay less tax and increase your tax home pay or offset tax payments by investing your earnings.