Income Tax (Earnings and Pensions) Act 2003 section 12

Calculation of "net taxable specific income"

Section 12 explains how to calculate "net taxable specific income" from an employment for a tax year, using a simple formula that deducts allowable amounts from taxable specific income.

• Net taxable specific income is calculated as taxable specific income (TSI) minus allowable deductions from that specific income (DSI)
• The deductions (DSI) are those permitted under the Tax Acts, but excluding deductions listed in section 327(3) and (4), which relate to deductions from general earnings
• If the calculation produces a negative figure, the net taxable specific income is treated as nil rather than a negative amount
• Where an individual has more than one type of specific employment income from the same employment, the calculation must be performed separately for each type, and the results are then added together to give the total net taxable specific income