1. What is the Better Off Calculation?

The Better Off Calculation is used to determine whether a change in employment or income situation will leave an individual financially better off. It compares the new income against the current income to show the net difference.

2. How Does the Calculator Work?

The calculator uses a simple formula:

Where:

• New Income — The proposed or potential new income amount
• Current Income — The existing income amount

Explanation: A positive result means you would be better off financially, while a negative result means you would be worse off.

3. Importance of Better Off Calculation

Details: This calculation helps individuals make informed decisions about job changes, promotions, or other income-altering situations by quantifying the financial impact.

4. Using the Calculator

Tips: Enter both income amounts in GBP. Use gross income figures for pre-tax comparison or net income for take-home pay comparison.

5. Frequently Asked Questions (FAQ)

Q1: Should I use gross or net income?
A: For a complete picture, calculate both. Gross shows pre-tax impact, while net shows actual take-home difference.

Q2: What about additional benefits?
A: This is a basic calculation. For comprehensive analysis, factor in pensions, bonuses, and other benefits.

Q3: How accurate is this calculation?
A: It provides a basic comparison. For precise figures, consult a financial advisor or use detailed tax calculators.

Q4: Does this account for tax changes?
A: No, this is a simple difference calculation. For tax impact, use HMRC's tax calculators.

Q5: Can I use this for self-employment comparisons?
A: Yes, but remember to account for additional self-employment costs and taxes.