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Why you can't just add 20% to the figure on your bank statements
Adding up the totals on your bank statements and then adding the 20% tax to the total is one of the most common errors made on a tax return.
If you take the income from your bank statements, total it up and then work out 20% of that figure, either using your calculator's percentage button or by diving the sum by £100 and multiplying it by 20.
If you then add the 20% total on to the total income from your bank statements, this is wrong!
The amount paid into your bank already had tax deducted on it, so what you are effectively doing is taxing a figure that's already been taxed.
If you multiply by 20 in any of your calculations, it will be wrong.
If you're still unsure you can check our calculations and compare using this calculator, or better still, simply type your totals into our NET pay boxes rather than gross and we will do the rest for you.
This table calculates correctly:
| Tax estimate (take home pay ÷ 100 × 25) | £0 | |
|---|---|---|
| Gross pay (take home pay + tax) | £0 | |
| So let's do that in reverse to double-check those figures... | ||
| Gross pay (from above) | £0 | |
| Actual tax (20% of gross pay) | £0 | |
| Take home pay (gross pay - actual tax) | £0 | |
| Take home pay off by | £0 | |
This table does not calculate correctly:
| Tax estimate (take home pay ÷ 100 × 20) | £0 | |
|---|---|---|
| Gross pay (take home pay + tax) | £0 | |
| So let's do that in reverse to double-check those figures... | ||
| Gross pay (from above) | £0 | |
| Actual tax (20% of gross pay) | £0 | |
| Take home pay (gross pay - actual tax) | £0 | |
| Take home pay off by | £0 | |
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