Help with net monthly wage difference

[Ferrari60]

Currently have an offer of £95k + £7.2k of allowances.

My current salary is £77k + 10k car allowance

I am trying to work out net monthly difference between current wage and offer. Can anyone help?

I want to see if the extra ££ will be worth the stress

[mrmistoffelees]

https://www.thesalarycalculator.co.uk/salary.php

[Ferrari60]

That calculator just is not working for me for some weird reason

[Alex Z]

As a rough approximation for a higher rate tax payer, £1000 increase in salary gets you an extra £50 a month in your pocket.

[vaud]

When you say "allowances" - are these options you can buy into each year (e.g. healthcare)?

If so it will be hard to give an absolute as their taxable status varies (tax and NI)

[Alorotom]

I would suggest using https://listentotaxman.com and using your specific tax code and circumstances and it should be pretty accurate

[MickC]

Alorotom said:

I would suggest using https://listentotaxman.com and using your specific tax code and circumstances and it should be pretty accurate

Won't his tax code change significantly in the new job, depending on what those allowances are?

Anyway I'm surprised someone on a 100k+ package can't work it out themselves, I must be in the wrong job

[Ferrari60]

The difference of £750 seems incorrect considering the significant gross wage uplift

[Ferrari60]

Alex Z said:

As a rough approximation for a higher rate tax payer, £1000 increase in salary gets you an extra £50 a month in your pocket.

£50??

[Ferrari60]

vaud said:

When you say "allowances" - are these options you can buy into each year (e.g. healthcare)?

If so it will be hard to give an absolute as their taxable status varies (tax and NI)

Nope it is just additional ££

[essayer]

Ferrari60 said:

£50??

Yup

Also if you have any other income sources be aware that once you get >£100k total for the year you will start losing personal allowance and pay a higher overall tax rate

[Alex Z]

Ferrari60 said:

Alex Z said:

As a rough approximation for a higher rate tax payer, £1000 increase in salary gets you an extra £50 a month in your pocket.

£50??

Yep, it’s only £83 a month before tax.

[Ferrari60]

essayer said:

Ferrari60 said:

£50??

Yup

Also if you have any other income sources be aware that once you get >£100k total for the year you will start losing personal allowance and pay a higher overall tax rate

Do you mean £500??

[Ferrari60]

Alex Z said:

Ferrari60 said:

Alex Z said:

As a rough approximation for a higher rate tax payer, £1000 increase in salary gets you an extra £50 a month in your pocket.

£50??

Yep, it’s only £83 a month before tax.

Please could you explain how this is.

I want to know net monthly difference between both

[Macneil]

CheesecakeRunner said:

Ferrari60 said:

Alex Z said:

Ferrari60 said:

Alex Z said:

As a rough approximation for a higher rate tax payer, £1000 increase in salary gets you an extra £50 a month in your pocket.

£50??

Yep, it’s only £83 a month before tax.

Please could you explain how this is.

I want to know net monthly difference between both

(£1000 per annum increase / 12 months) - 40% tax = roughly £50 per month extra take home.

Your problem will be how those ‘allowances’ are paid. If they are normal pay, then you’ll go into the “£100k lose your tax allowance” bracket so you need to sit down with one of the tax calculators already mentioned and work it out properly, as the rules of thumb won’t work for you.

Edited by CheesecakeRunner on Sunday 28th May 15:58

Mate your wasting your time feeding a troll...

[Ferrari60]

CheesecakeRunner said:

Ferrari60 said:

Alex Z said:

Ferrari60 said:

Alex Z said:

As a rough approximation for a higher rate tax payer, £1000 increase in salary gets you an extra £50 a month in your pocket.

£50??

Yep, it’s only £83 a month before tax.

Please could you explain how this is.

I want to know net monthly difference between both

(£1000 per annum increase / 12 months) - 40% tax = roughly £50 per month extra take home.

Your problem will be how those ‘allowances’ are paid. If they are normal pay, then you’ll go into the “£100k lose your tax allowance” bracket so you need to sit down with one of the tax calculators already mentioned and work it out properly, as the rules of thumb won’t work for you.

Edited by CheesecakeRunner on Sunday 28th May 15:58

My allowances are added to salary so essentially overall income is £102,000.

I was going to salary sacrifice 4% of my 95k salary into a pension to avoid going over 100k.

Essentially it would be good to know how much my net monthly take home is

[Ferrari60]

Macneil said:

CheesecakeRunner said:

Ferrari60 said:

Alex Z said:

Ferrari60 said:

Alex Z said:

As a rough approximation for a higher rate tax payer, £1000 increase in salary gets you an extra £50 a month in your pocket.

£50??

Yep, it’s only £83 a month before tax.

Please could you explain how this is.

I want to know net monthly difference between both

(£1000 per annum increase / 12 months) - 40% tax = roughly £50 per month extra take home.

Your problem will be how those ‘allowances’ are paid. If they are normal pay, then you’ll go into the “£100k lose your tax allowance” bracket so you need to sit down with one of the tax calculators already mentioned and work it out properly, as the rules of thumb won’t work for you.

Edited by CheesecakeRunner on Sunday 28th May 15:58

Mate your wasting your time feeding a troll...

I am not a troll. Wanted help.

[JeremyH5]

Alec Z’s rough answer is roughly right.

If you are currently on £87k (77+10) and will put anything above £100k in pension (good move) then your increase will be
100k-87k=13k. £13k divided by 12 is £1,083.33 gross per month on which you will lose 2% NI and 40% higher rate tax. So your net pay will be 58% of 1,083.33 = £628.33 net per month.

[Ferrari60]

JeremyH5 said:

Alec Z’s rough answer is roughly right.

If you are currently on £87k (77+10) and will put anything above £100k in pension (good move) then your increase will be
100k-87k=13k. £13k divided by 12 is £1,083.33 gross per month on which you will lose 2% NI and 40% higher rate tax. So your net pay will be 58% of 1,083.33 = £628.33 net per month.

Thanks Jeremy. I tried out the calculator and it was showing £750.

At present I salary sacrifice 5% of my 77k current wage. I pick up around £4.8k monthly after wage reductions.

With this new offer I was expecting around 5.4k with 3% salary sacrifice of 95k. But it seems to be less?

[JeremyH5]

Ferrari60 said:

JeremyH5 said:

Alec Z’s rough answer is roughly right.

If you are currently on £87k (77+10) and will put anything above £100k in pension (good move) then your increase will be
100k-87k=13k. £13k divided by 12 is £1,083.33 gross per month on which you will lose 2% NI and 40% higher rate tax. So your net pay will be 58% of 1,083.33 = £628.33 net per month.

Thanks Jeremy. I tried out the calculator and it was showing £750.

At present I salary sacrifice 5% of my 77k current wage. I pick up around £4.8k monthly after wage reductions.

With this new offer I was expecting around 5.4k with 3% salary sacrifice of 95k. But it seems to be less?

Sorry you’ll be putting less into pension than before on higher earnings? Odd logic to me. Not sure about that!
(95,000 x 3% = 2,850; 77,000 x 5% = 3,850.

Anyway, leaving that to one side, the calcs based on your new numbers will be:

95000 - 2850 = 91250 => 91250 + 7200 = 98450 new taxable income.
77000 - 3850 = 73150 => 73150 + 10000 = 83150 old taxable income

So 98450 - 83150 = 15300 increase in taxable income.

15300 divided by 12 = 1275 gross per month and you only get 58% net as above, so 58% of 1275 = 739.50. I haven’t tried it in that calculator but I’m in the same ball park

Have you ensured the calculator is using the same personal allowance as is shown on you latest payslip?

Another thought, it is early in the tax year, is there any tax refund element in your 2023/24 tax code for an over payment last year that is causing you to have a high net pay at present?

Let’s check, a calculation of current net pay would give:
Tax on 83150
First 12570 0%. 0.00
Next 37700 20% 7540.00
Next 32880 40% 13152.00
Total 83150 20692.00

NI on 83150
First 12570 0% 0.00
Next 37700 12% 4524.00
Next 32880 2% 657.60
Total 83150 5181.60

83150 - 20692 - 5181.60 = 57276.40
57276.40 divided by 12 = 4773.03 which is probably your 4.8k

We can prove the difference by doing the same calculation on the new taxable pay:

Tax on 98450
First 12570 0%. 0.00
Next 37700 20% 7540.00
Next 48180 40% 19272.00
Total 98450 26812.00

NI on 98450
First 12570 0% 0.00
Next 37700 12% 4524.00
Next 48180 2% 963.60
Total 98450 5487.60

98450 - 26812 - 5487.60 = 66150.40
66150.40 divided by 12 = 5512.53

Difference 5512.53 - 4773.03 = 739.50 which matches my answer above based just on the difference.

Unless I made a blunder, and someone please point it out if I have, you have your answer. Is it enough of a difference?