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How Do You Work Out Your Tax And Insurance?

I would like to know how I work out my own tax and national insurance.?

  • I don't want an external link to a tax calculator. I would like a formula, which 30 odd years ago before tax calcs and puters came along people had work it out. I would like to ...show more

  • Answer:

    Even in the pre-computer days there was never a formula. One had to use two books called tax tables. I spent many years training tax officers and then employers how to use this system which is extremely elegant and enables the correct tax to be paid throughout the year, providing employers know what they are doing! Basically, you take one twelth of your tax free allowance and deduct it from your monthly pay, then tax what it left at 20%. If your taxable income is over £36000, its more complicated.

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You can get a booklet off the Inland Revenue to show the way.,All you need to know is your code number which times 10 divided by 12 gives you your free pay per month. That is taxed at zero rate & the rest at 20%. You can get tables to work out the national insurance contribution.

David C

I used to make up the wages in a small company a good few years ago. I used pre-printed books which had various tax codes in them and national insurance contributions. I'm sure that you could still get them if you contacted the inland revenue, or maybe, they will have them on line.

Angela M

The £120 you have worked out is taken from the gross monthly amount so £1055 - £120 = £935 a month. You also need to deduct NI, which works in a similar way but the NI rate is 11%

Robin the Electrocuted

Try www.inlandrevenue.gov.uk

Gerry Atrix

best bet, get an accountant if u have big figures as u can get reimbursed for whatever u pay the accountant! pretty good huh

LS

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