This calculator will show the amount of an employee’s take home pay after PAYE income tax and national insurance contributions. It also shows the net cost to the employer. You just need to enter details of the gross monthly pay and PAYE coding.
Tax codings are used so that employers deduct the right amount of tax from an employee’s pay. HMRC add up all of an employee’s tax allowances and deducts such items as car benefit charge or other income that has not been taxed.
For example, for a gross monthly pay amount of £3,500 and a PAYE code of 475, the total income tax deducted under PAYE will be £1,187, the employee national insurance contributions will be £268, and the net pay will be £2,045. With the employer’s NIC at £394, the total cost to the employer will amount to £3,894 a month.
* The letter K before the number means that the total allowances in the code are less than the total deductions to be taken away from the allowances. The codes BR, DO, NT and OT are mainly used where the employee has a second source of income and all the tax allowances have been used in the tax code applied to the first or main income source.
