1. What is Commission Tax?

Commission tax in the UK is the income tax payable on commission earnings. It's calculated based on your total taxable income and the applicable tax band for the 2024-25 tax year.

2. How Does the Calculator Work?

The calculator uses the simple tax formula:

Where:

• \( Commission \) — Your commission earnings in GBP
• \( Tax\ Rate \) — The applicable tax rate (20%, 40%, or 45%)

Note: This provides an estimate of tax due on commission. Your actual tax liability may vary based on your total income and personal allowance.

3. UK Tax Rates for 2024-25

Basic Rate (20%): For income between £12,571 to £50,270
Higher Rate (40%): For income between £50,271 to £125,140
Additional Rate (45%): For income above £125,140

4. Using the Calculator

Instructions: Enter your commission amount in GBP and select the appropriate tax rate based on your income band. The calculator will show the estimated tax due on your commission.

5. Frequently Asked Questions (FAQ)

Q1: Is commission taxed differently from salary?
A: No, commission is taxed as part of your total income at the same rates as salary, but it may be paid through PAYE or self-assessment.

Q2: When is commission tax due?
A: If paid through PAYE, tax is deducted automatically. For self-employed, it's due by 31 January following the tax year.

Q3: Can I claim expenses against commission?
A: Yes, if the expenses were wholly and exclusively for earning the commission, they may be deductible.

Q4: What if my commission pushes me into a higher tax band?
A: Only the amount above the threshold is taxed at the higher rate.

Q5: Are there National Insurance contributions on commission?
A: Yes, NICs are also payable on commission earnings at the standard rates.