1. What is Commission Tax?

Commission tax in the UK is the income tax payable on commission earnings, which are treated as part of your taxable income. The amount of tax depends on which income tax band your total earnings fall into.

2. How Commission Tax is Calculated

The calculator uses the standard UK tax formula:

Where:

• \( Commission \) — Your commission earnings in GBP
• \( Tax\,Rate \) — The applicable tax rate percentage based on your income band

3. UK Tax Rates Explained

Current UK Income Tax Rates (2023-2024):

• Basic Rate (20%): £12,571 to £50,270
• Higher Rate (40%): £50,271 to £125,140
• Additional Rate (45%): Over £125,140

Note: Personal allowance is £12,570 (income not taxed).

4. Using the Calculator

Instructions: Enter your commission amount in GBP and select the appropriate tax rate based on your total income band. The calculator will show the tax payable 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, just like salary. The same tax rates apply.

Q2: When is commission tax due?
A: Through PAYE if you're employed, or via self-assessment if you're self-employed.

Q3: Can I claim expenses against commission?
A: Yes, allowable business expenses can be deducted before calculating taxable commission.

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.