Methodology

Every rate, threshold and allowance on this site lives in one place — a set of rules files that the calculators read and that nothing else duplicates. The tables on these pages are generated from those same files at build time, so a methodology page cannot describe a rate the calculator is not using. Where a figure comes from government material, the source is linked and the date it was checked is stated.

• Investment calculator — methodologyThe period step, the two rate bases, the three kinds of fee, and why a fixed-rate projection is not a forecast.
• Compound interest calculator — methodologyThe period step, why an AER makes the compounding interval almost irrelevant, how the charge is applied, and why a fixed-rate calculation is not a forecast.
• Dividend tax calculator — methodologyThe statutory stacking order, every allowance in the order it applies, the rates table, the gov.uk sources and the date they were checked.
• Capital gains tax calculator — methodologyHow a gain stacks on income, the annual exempt amount, the rates table, the gov.uk sources and the two limits that change the answer.
• Capital gains tax on shares — methodologyWhat HMRC’s share identification rules do, why this calculator does not apply them, and how the gain you supply is then stacked on your income and taxed.
• Self-employed tax calculator — methodologyThe two bases a self-employed bill is charged on, Class 4 band by band, why Class 2 is a status rather than a charge, and the five things the calculation does not model.
• Corporation tax calculator — methodologyHow marginal relief actually works, why the marginal rate exceeds the main rate, how associated companies divide the limits, the rates table and the gov.uk sources.
• Salary and dividend calculator — methodologyHow the four engines compose — corporation tax, employer and employee National Insurance, and income tax — and why a salary costs the company more than the salary.
• Savings interest calculator — methodologyHow savings interest is taxed as the second slice of income: the starting rate for savings, the personal savings allowance that shrinks as income rises, the single pound that halves it, the UK-wide bands that apply in Scotland too, and the gov.uk sources behind each figure.
• Pension drawdown calculator — methodologyHow the pot is projected, how the withdrawal is taxed as earned income on top of everything else, why the personal allowance taper makes a large withdrawal so expensive, and which half of the page carries a gov.uk verification and which half cannot.
• Stocks and shares ISA calculator — methodologyThe period-by-period projection, the year-by-year dividend tax it avoids, the capital gains tax it avoids on sale, and why only half of this page carries a verification stamp.
• ISA calculator — methodologyOne limit across four account types, the Lifetime ISA nested inside it, the Junior ISA outside it, the bonus that is not a subscription, and every figure sourced and dated.
• Scotland tax calculator — methodologyWhich part of a Scottish tax bill is actually Scottish, how the same income is run twice to isolate it, and why a line charged on UK-wide rates can still move between the two columns.
• Take home pay calculator Scotland — methodologyThe two deductions a Scottish salary meets, set by two different parliaments on two different amounts — why one moves at the border and the other does not, and why the monthly figure is a division rather than a payslip.
• Income tax calculator Scotland — methodologyThe six Scottish bands in both the taxable-income figures the calculation uses and the gross figures gov.scot publishes, why the top band is the one where adding the personal allowance gives the wrong answer, and what Scotland does not set.
• Salary sacrifice calculator — methodologyWhy a sacrifice is modelled as a smaller salary rather than a pension input, why the cost of sacrificing is not any published rate, and how the same money into a personal pension is priced against it.
• National insurance calculator — methodologyTwo Class 1 charges on the same pay and only one of them on a payslip, why the employee rate falls above the upper earnings limit while the employer rate never does, the self-employed classes, and how a director’s annual earnings period is modelled without a monthly threshold this software does not have.
• Annuity calculator — methodologyWhy this calculator asks you for the annuity rate instead of quoting one, how the tax-free lump sum and the income tax on the income are worked out, what the tax-free cash decision actually costs, and how the same purchase price compares as drawdown — with each of the three claims scoped to what it can support.
• Income tax calculator — methodologyThe statutory stacking order, how the personal allowance and High Income Child Benefit Charge are calculated, why the bands are restated in gross income, and where the marginal rate exceeds every rate in the table.
• Dividend calculator — methodologyHow a holding is turned into a stream of payments, how reinvestment compounds it, and how the tax on each year is measured against the statutory stacking order rather than a single rate.
• Mortgage overpayment calculator — methodologyThe five steps of each month, why the overpayment lands after the interest charge, why a mortgage rate is divided by twelve rather than compounded, and the product terms this cannot model.
• Retirement calculator — methodologyHow the two halves of a retirement plan are projected and joined, how "what do I need to save?" is solved backwards through three engine calls, why inflation and an inflation-linked income are separate inputs, why the State Pension is offered as a benchmark and never filled in, when the legislated State Pension age falls and how an income that starts partway through a retirement changes what the pot has to do, why the longevity figures are a range rather than a life expectancy, and which part carries a gov.uk verification and which part cannot.
• Inheritance tax calculator — methodologyWhy the rate on the next pound of a large estate is half as much again as the rate everyone quotes, why taper relief almost never does what readers expect, and the seven things this calculation deliberately leaves out.
• Pension calculator — methodologyHow tax relief is measured rather than rated, what the annual allowance and its taper actually cap, how carry forward works and what it cannot be used for, how the pot is projected, why today’s money is a change of units, and which parts of the page carry a gov.uk verification and which cannot.
• Junior ISA calculator — methodologyA term nobody chooses, a schedule keyed to the child’s age, the two ages at which the account changes hands, the allowance that belongs to the child rather than the parent, and which half of the page is verified.
• Bed and ISA — methodologyWhy the share identification rules do not reach a repurchase made inside an ISA, what the sale therefore crystallises, and what the round trip costs.
• Investment fee calculator — methodologyHow the cost of a charge is measured by subtracting two schedules, why an ongoing charge and a platform fee are different arithmetic, and why the cost is always larger than the deduction.
• Dollar cost averaging calculator — methodologyHow the two sides are built from the same money, why a constant-rate model can only ever favour the lump sum, and what the volatility argument is that this model cannot represent.
• ETF calculator — methodologyHow a per-order dealing charge is modelled as a smaller contribution, why every order lands at the end of its period, and why the commission sits outside the schedule’s own reconciliation.
• Index fund calculator — methodologyThe four rates between an index and a pot, why they compose multiplicatively, why a price index is not what a fund tracks, and why the tracking gap is not the ongoing charge.
• S&P 500 calculator — methodologyWhy this calculator will not tell you what the index has returned, how it answers the inverse question instead, and how a dollar index and a sterling investor’s return are composed.
• Net worth calculator — methodologyAssets less liabilities, then the part no incumbent shows: the income tax attached to a pension, the capital gains tax attached to an unwrapped gain, and what the same total costs on death.
• Emergency fund calculator — methodologyThe runway you already have rather than a number of months somebody asserted, what running out would cost in borrowing and in capital gains tax, and the fund size at which interest outside an ISA starts being taxed.
• FIRE calculator — methodologyWhere the 4% rule actually comes from and why the rate is a field rather than a constant, how the two pots are projected and the year of arrival is found, how the years between stopping work and pension access are priced, and which of the three claims on the page the gov.uk check covers.
• Coast FIRE calculator — methodologyWhat coast FIRE solves for and why it is a different unknown from full FIRE, how the coast number is found by re-running the projection rather than discounting the target, why the year you can stop paying in is a scan rather than a solve, and why a page with no statutory figure on it carries no verification stamp.
• Pension tax relief calculator — methodologyWhy relief is a difference between two tax positions rather than a contribution times a rate, which limits a contribution moves and which it does not, and why the relief rate inside the personal allowance taper is not a rate anybody publishes.
• Pension contribution calculator — methodologyHow a percentage of salary becomes an amount, why the annual allowance is measured against everything going in while relief is measured against your own contribution, and why the taper needs two income measures rather than one.
• SIPP calculator — methodologyHow a net contribution becomes a gross one, how the relief and the projection are kept apart, the conventions the pot is compounded under, and why the tax at the far end is exact arithmetic over a number nobody can know.
• Rental yield calculator — methodologyWhy the gross and net yields share a denominator, why the return on your own cash is a different figure with a different one, and how the finance cost restriction of Section 24 is computed from the tax engine rather than from a rate.
• Dividend yield calculator — methodologyThe four things called “the yield”, why cover is the only one of them that a falling price does not flatter, and why the tax figure beside a yield has to be a marginal rate rather than an average one.
• Bond yield calculator — methodologyRunning yield against redemption yield, clean price against dirty price, the bisection that solves for a yield to maturity and how far it converges — and why a gilt’s exemption from capital gains tax makes two bonds with the same gross yield unequal after tax.
• Second job tax calculator — methodologyWhy income tax has no second job rate, why a BR code is a collection mechanic rather than a rate, and why National Insurance — charged per employment rather than per person — makes the same money cost two different amounts.
• Pension carry forward calculator — methodologyWhy carry forward is the one calculation here that reads four tax years at once, the statutory order unused allowance is used in, and why the allowance it gives you is not the same thing as relief.
• Pension lump sum calculator — methodologyWhy the taxable part of a pension lump sum is stacked on other income rather than taxed at a rate, why a single large withdrawal is punished by the personal allowance taper, and how a month 1 emergency code is computed exactly out of the same engine.
• Personal savings allowance calculator — methodologyWhy an unused personal savings allowance is not spare tax-free interest, why the allowance steps rather than tapers, how the starting rate for savings is withdrawn pound for pound, and why the engine’s marginal rate is the wrong figure for the next pound of interest.
• Crypto profit calculator — methodologyWhy HMRC charges cryptoassets to capital gains tax rather than treating them as currency or as gambling, why a gain is stacked on income rather than charged at a rate, and why this calculator states the pooling rules instead of applying them.
• Lifetime ISA calculator — methodologyWhy a bonus on a contribution and a charge on a withdrawal do not cancel, the three charge-free circumstances, the property cap as a hard edge rather than a taper, the three separate age tests, and the same contribution priced into a pension.

This site publishes information, not advice. It cannot know your circumstances, it does not recommend any product, provider or course of action, and nothing on it is a personal recommendation. For a decision that matters, check the figures against gov.uk or speak to an accountant or a regulated adviser.

Errors that reached a reader are recorded on the corrections log. It is empty, and it exists anyway — see that page for why.