Monday
Apr052010
Tax Computation for a Salary of £250,000 per Annum
Monday, April 5, 2010 at 11:48AM | Personal tax computation | 2009/2010 | 2010/2011 | ||
| £ | £ | |||
| Salary | 250,000 | 250,000 | ||
| Personal allowance | 6,475 | - | ||
| Taxable income | 243,525 | 250,000 | ||
| Basic rate | 7,480 | 7,480 | ||
| Basic rate extension | 3,125 | 3,125 | ||
| Higher rate | 76,200 | 45,040 | ||
| Additional rate | 42,188 | |||
| Tax liability | 86,805 | 97,833 | ||
| National Insurance | ||||
| Employee contributions | 6,468 | 6,468 | ||
| Employer contributions | 31,268 | 31,268 | ||
| Net pay | 144,227 | 133,200 | ||
| Percentage Retained by Individual | 58% | 53% | ||
Reader Comments (1)
Instructions and Assumptions
1. No account has been taken of the savings rate as all income is salary.
2.The computations can calculate the relief on pension contributions up to £20,000 per annum (or pension contributions exceeding this amount that are paid at least quarterly at the same rate the individual applied prior to 22 April 2009). Please note that with effect from 6th April 2011, higher rate relief on pension contributions will be restricted for individuals with income exceeding £150,000 per annum.
3. For simplicity the computation works for income levels above the earnings threshold only.
4. Prospective amendments to section 192 Finance Act 2004 suggest that the extension of the basic rate band on granting further tax relief for pension contributions does not simply cause more income to be taxed at the 50% rate. This computation has been calculated on this basis.