£45,000.00 Tax Calculation for 2019/20 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
|Yearly||Monthly||4 Weekly||2 Weekly||Weekly||Daily||Hourly||%1|
|Adjusted Gross Income2||44,550.00||3,712.50||3,426.92||1,713.46||856.73||176.09||24.48||99.00%|
|Tax Free Personal Allowance||12,500.00||1,041.67||961.54||480.77||240.38||49.41||6.87||27.78%|
|Company Pension: Employee||450.00||37.50||34.62||17.31||8.65||1.78||0.25||1.00%|
|Company Pension: Employer||450.00||37.50||34.62||17.31||8.65||1.78||0.25||1.00%|
|Employers NIC Contribution||5,021.27||418.44||386.25||193.13||96.56||19.85||2.76||11.16%|
|Salary Package [Cost of Employee]||50,471.27||4,205.94||3,882.41||1,941.20||970.60||199.49||27.73||112.16%|
1 Percentage expressed in relation to Gross Income [£44,550.00].
2 Adjusted Gross Income allows for tax free deductions including Salary Sacrifice schemes.
How to calculate £45,000.00 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 £45,000.00
PAYE is calculated using separate tax rates and thresholds, in simple terms the more your earn, the higher the rate of tax applied. Let's take a look at how much tax you pay on £45,000.00.
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:
|£32,050.00||Income taxable at Basic rate in 2019|
|x||20%||Basic rate Income tax rate in 2019|
|=||£6,410.00||PAYE due at Basic rate in 2019|
|=||£0.00||PAYE due at Additional rate in 2019|
|=||£0.00||PAYE due at Higher rate in 2019|
|=||£6,410.00||PAYE due at Basic rate in 2019|
|=||£6,410.00||Total PAYE due in 2019|
How Much tax should I Pay?
Based on this salary illustration for £45,000.00 you should pay £6,410.00 in income tax. Typically, this will be collected through the PAYE (Pay As You Earn) scheme with deductions being taken directly from your monthly pay for example. PAYE will show on your payslip each month, in this income tax calculation your monthly PAYE will be £534.17
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 £45,000.00
How we calculated your National Insurance Contributions
National Insurance Contributions (NICs) in 2019 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)|
|+||£4,366.32||[ 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)|
|=||£4,366.32||Total National Insurance Contributions in 2019|
|£44,550.00||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)|
|=||£36,386.00||Amount subject to Primary Threshold National Insurance Contributions in 2019 |
= (lesser of £36,386.00 and £45,032.00)
|x||12%||Employee's Class 1 contribution rate between Primary Threshold and Upper Secondary Threshold for under 21s|
|=||£4,366.32||Your employee Primary Threshold NICS in 2019|
|£44,550.00||Adjusted income (allowing for Salary Sacrifice and Pensions)|
|-||£8,164.00||Weekly Secondary Threshold (ST) (52 x £157.00)|
|=||£36,386.00||Amount subject to Secondary Threshold National Insurance Contributions in 2019|
|x||13.8%||Employer's Class 1 contribution rate above Secondary Threshold|
|=||£5,021.27||Your employer NICS in 20191|
|1 Employers can claim up to £3,000.00 off the NIC bill in 2019 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 £45,000.00
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||£45,000.00||Annual Gross Salary|
|£450.00||Your employee pension contributions in 2019|
|1%||Percentage contribution based on your annual gross salary|
|£45,000.00||Annual Gross Salary|
|£450.00||Your employer pension contributions in 2019|
Payroll and Salary Deductions: The Basics
If you have never really looked at your payslip or perhaps it's your first job and the first time you have looked at a payslip, it is worth spending a few minutes getting to know what the different deductions and payroll details are. Understanding your payslip and payroll deductions allows you to identify potential errors and know what to do when mistakes are made so you can claim back any overpaid tax. The guides below are easy to read and designed to provide a basic understanding of payslip and payroll deductions.
Related Calculations and Tools
Pay Slip Example
A simple payslip example for an annual salary of £45,000.00. A quick tool that allows you to compare your own payslip. Select specific months to see how your future payslips will look including total earnings and deductions. Useful for understanding your total income and deductions for financial planning such as mortgage calculation or loan affordability etc.
Basic Salary Example
Provides a periodic breakdown (Day, week, month etc.) of the calculated payroll deductions relevant to a £45,000.00 annual Salary. Includes links to supporting information which explains each tax and payroll deduction and what you can do to reduce the amount of PAYE tax and National Insurance you pay. Everyone who pays tax can reduce the amount of tax they pay but most don't take the few minutes needed that could save them £££'s. Don't be a fool, it's your money, make sure you get what you are entitled to, make 2019 the year that you get your finances in order.
PAYE and Payroll Analysis
You never know where you are until you know where you have been. As we discussed in the £45,000.00 Tax and Payroll Deductions Calculations, understanding your salary and payroll deductions is essential. In this suite of salary calculations we review and compare historical tax deductions with a view to providing insight into how tax and payroll deductions have influenced the take home pay of a £45,000.00 annual salary. We also review each deduction and provide a table of the associated deductions and line and pie charts to illustrate the differences. The aim of these tools is to allow insight into the makeup and trend of salary against a fixed annual income of £45,000.00. We also reverse engineer the £45,000.00 salary to reflect inflation change over the year.
Employer Payroll Calculations
As an employer it is important to understand your holistic employment costs when taking on new staff or increasing / decreasing salaries. The employer payroll calculation for an employee on a £45,000.00 salary illustrates you Employer National Insurance Contributions (ENICs) and associated Pension costs to provide a cost of employment calculation. The employer payroll calculation also includes historical information so you can understand how employment costs have changed over the years as payroll taxes have been adjusted and new employer legislation introduction.
End of Tax Year and P60 checks
It's incredible how quickly the years pass but not as incredible as the sum of overpaid, unclaimed tax that sits within the treasury each year simply because individuals don't make the basic checks on their P60. It is wrong to assume that HMRC get your tax calculations right every year. Whilst electronic payslips (epayslips) have facilitated a more accurate and timely flow or financial information to and from HMRC mistakes are still made. Typical mistakes include the incorrect setup of salary sacrifice schemes, pension schemes and applying the wrong tax code. In addition to this you can also claim back the unclaimed tax relief on your donations. We brits are great at donating to worthy causes like Comic Relief, Sport Relief, Help for Heroes and other domestic charities but most never claim back their tax relief. For a basic rate tax payer that is £5 of tax relief for every £20 you donate. If you don't claim that back, the treasury keep it. So, don't wait for the end of the tax year, give yourself a quick finance MOT, our P60 section explains all you need to know and what to do to get your money back.
The Dividends calculator allow you to adjust the split of your £45,000.00 income by using a slider to alter the percentage split you take as salary or via a dividend. This tool allows you to understand which solution is best for your circumstances. The £45,000.00 Dividend calculator will automatically calculate Corporation Tax, Dividend Tax and all associated payroll deductions so you can make an informed decision on the most appropriate income stream. This is a great tool for contractors and company directors and popular with those who and looking at the benefits of setting up their own limited company rather than working as a sole trader or as an employee looking to start their own business.
With property prices constantly on the rise it can seem as though your will never save a large enough deposit to buy your dream home on an annual salary of £45,000.00 (you could borrow between £135,000.00 and £202,500.00). Our
How Much Mortgage can you afford when earning £45,000.00?
Looking for a great deal on your mortgage? Did you know that based on an annual salary of £ 45,000.00 that you could borrow between £135,000.00 and £202,500.00. 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.
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Self Assessment 2018
Don't leave your 2019/20 Self Assessment to the last minute this year, update your information on the go and save time and stress, you will probably save yourself a few pounds too. Grab a free trial now and make tax less taxing.