Deductions Formula:
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Definition: This calculator determines the total deductions from wages by comparing gross pay to net pay in the UK.
Purpose: It helps employees and employers understand how much is being deducted from wages for taxes, National Insurance, pensions, and other withholdings.
The calculator uses the formula:
Where:
Explanation: The difference between gross and net pay represents all deductions including income tax, National Insurance, pension contributions, and other withholdings.
Details: Knowing your deductions helps with financial planning, ensures correct tax payments, and helps identify any potential errors in payroll processing.
Tips: Enter your gross wage (before deductions) and net wage (take-home pay) in GBP. Both values must be positive numbers, and gross must be greater than or equal to net.
Q1: What's included in UK wage deductions?
A: Typically includes Income Tax, National Insurance, pension contributions, student loan repayments, and any other voluntary deductions.
Q2: Why is my gross wage different from my net wage?
A: The difference represents all mandatory and voluntary deductions required by UK law and your employment agreement.
Q3: How can I check if my deductions are correct?
A: Compare your payslip with HMRC tax codes and National Insurance contribution tables, or use the UK government's online tax calculator.
Q4: Can this calculator show breakdown of different deductions?
A: No, this only calculates the total deductions. For detailed breakdown, consult your payslip or use HMRC's detailed tax calculators.
Q5: What if my net wage is higher than gross?
A: The calculator will show an error as this is not possible under normal circumstances (unless receiving additional untaxed payments).