SavingTool / hmrc-income-tax

TypeScript implementation of common HMRC Income Tax use cases
https://SavingTool.co.uk
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Student loans are calculated before tax #1

Closed sgb-io closed 2 years ago

sgb-io commented 2 years ago

In SavingTool, src/selectors/taxes.ts L50 it seems like we are passing "gross" income to the student loan calculations. I am not sure this is correct?

Either it's a bug in SavingTool or this project.

sgb-io commented 2 years ago

I think it's a bug in this project - I think that NICs and SL repayments are calculated before deductions (pension deductions for example). Comment below suggests this is incorrect

sgb-io commented 2 years ago

Different calculators online seem to do this differently.

If we assume that pension contributions are done via salary sacrafice, according to this page, I am pretty sure NICs (and SLRs) are payable on the post-pension contribution amount: https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye

There is an example on that page where someone sacrafices their whole bonus - no NICs or Income Tax apply.

sgb-io commented 2 years ago

There is also various anecdotal evidence online (and probably my own payslips) to support the idea that it's the same for SL repayments. So - bug in SavingTool, not this project.

sgb-io commented 2 years ago

Created a bug in that project: https://github.com/sgb-io/saving-tool/issues/55