Cable Forum - Salary Calculation

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Salary Calculation

Hi all,

I'm employed with a yearly salary and also have a car allowance paid monthly.

How do I work out how much tax I pay on that car allowance?

Cheers

Lee

Re: Salary Calculation

Quote:

Originally Posted by SnoopZ (Post 35931366)

Any of these help?

https://www.gov.uk/calculate-tax-on-company-cars

https://comcar.co.uk/newcar/companycar/taxcalc/

No - they are for company cars. I have a monthly car allowance...not a company supplied vehicle.

Re: Salary Calculation

Quote:

Originally Posted by LSainsbury (Post 35931371)

No - they are for company cars. I have a monthly car allowance...not a company supplied vehicle.

You may find something here, the rules for this changed in April 2017 so you will have to read more on that page to see if it helps.

https://www.clm.co.uk/company-car-tax/

Quote:

Cash allowance change example

For a petrol car emitting 120 g/km with a P11D value of £15,000, the tax for 2016/17 would currently be due at your highest tax rate on £3,150 (list price of £15,000 x 21%). If your marginal rate of tax was 40% you’d end up paying £1,260 in tax. Your employer would also pay class 1A NIC on the same value.

If you had the option of taking a cash alternative of £4,000, under the new rules this would be taxed rather than the £3,150. So the tax you’d actually pay would go up from £1,260 to £1,600.

However, if the cash allowance was £3,000 the tax you’d pay would be calculated on the £3,150 as before.

---------- Post added at 11:46 ---------- Previous post was at 11:42 ----------

There is also a cash allowance calculator here.

https://comcar.co.uk/cashorcar/

Re: Salary Calculation

Nope!

That's selecting a company car again.

All I need to know is how much of my car allowance is deducted for tax.

Re: Salary Calculation

Quote:

Originally Posted by LSainsbury (Post 35931409)

Nope!

That's selecting a company car again.

All I need to know is how much of my car allowance is deducted for tax.

I had a car allowance when I worked and the allowance was classed as part of my salary, I paid tax on my combined salary/car allowance at the tax rate that I sat in.

You can also claim tax relief on your mileage under the allowable expenses section on your tax return

Re: Salary Calculation

If you are a basic rate taxpayer then the following gives you how much tax you pay on your combined monthly salary/car allowance.

Tax = (Monthly Gross Salary + Car Allowance - 1054.17) x 0.2

This gives you the total tax paid in a month.

To work out how much tax you pay on your car allowance use the following.

(Car Allowance / Salary) x Tax(from above)

Obviously this is approximate figures.

Re: Salary Calculation

Quote:

Originally Posted by Mr Banana (Post 35931411)

I had a feeling that would be the answer - combine both and then deduct the tax.