1. What Is The Saving Interest Tax Calculator?

The Saving Interest Tax Calculator estimates the tax payable on savings interest based on UK tax rules (as of 2025). It considers your tax band and applies the appropriate Personal Savings Allowance (PSA) and tax rate.

2. How Does The Calculator Work?

The calculator uses the formula:

Where:

• \( Interest \) — Total savings interest earned (GBP)
• \( PSA \) — Personal Savings Allowance: £1,000 (basic rate), £500 (higher rate), £0 (additional rate)
• \( Tax\_Rate \) — Marginal tax rate: 20% (basic), 40% (higher), 45% (additional)

Explanation: Only interest above your PSA is taxable, at your marginal income tax rate.

3. Importance Of Tax Calculation

Details: Accurate tax calculation helps you understand your tax liability on savings, plan your finances, and avoid unexpected tax bills.

4. Using The Calculator

Tips: Enter your total savings interest in GBP and select your income tax band. The calculator will show your tax liability and PSA.

5. Frequently Asked Questions (FAQ)

Q1: What is the Personal Savings Allowance (PSA)?
A: The PSA is the amount of savings interest you can earn each tax year without paying tax. It varies by tax band.

Q2: Do I need to declare savings interest?
A: You must declare savings interest if it exceeds your PSA. Banks report interest to HMRC, but you're responsible for accurate declarations.

Q3: Are ISA savings included?
A: No, interest from ISAs is tax-free and doesn't count toward your PSA or taxable interest.

Q4: What if I have multiple savings accounts?
A: You must add together interest from all non-ISA savings accounts to calculate your total taxable interest.

Q5: How often should I calculate my savings tax?
A: Check periodically throughout the tax year, especially if you have fixed-term accounts maturing or variable interest rates.