Finance · UK Share Schemes

Share Incentive Plan (SIP) Calculator

Estimate the Income Tax and employee National Insurance effect of UK Share Incentive Plan partnership shares, or model a taxable early withdrawal using the rates that apply to your circumstances.

UFWritten and coded by Umer Farooq, CalcsDone founder/developer•Updated September 24, 2026

2026/27 approach: HMRC limits partnership-share deductions to the lower of £1,800 or 10% of salary. This calculator deliberately asks for your applicable Income Tax and employee NI rates instead of assuming that a tax band automatically determines one combined percentage.

Estimate SIP Tax & NI

2026/27 · UK SIP

Relevant annual salary

Use the salary definition in your plan rules.

Planned partnership-share deduction

Applicable marginal Income Tax rate

Applicable employee NI rate

For most category A employees in 2026/27: 8% in the main band and 2% above the Upper Earnings Limit; actual payroll can span bands.

Employer matching ratio

Your employer may offer less than the statutory maximum.

Allowed contribution used

—

lower of input and statutory cap

Estimated Tax + NI not deducted

—

using your entered rates

Estimated net-pay cost

—

Matching value: —

Enter salary, contribution and the rates that apply to the contribution.

Estimate only: this is not PAYE software or tax advice. Income Tax and NI depend on payroll circumstances, tax code, NI category, earnings bands and the specific share event. Confirm your plan rules and HMRC treatment before acting.

Rules used

How the SIP Calculator Works

The page separates statutory SIP limits from the tax and NI rates that depend on the employee’s own circumstances.

Partnership-share limit

HMRC says partnership-share money is limited to the lower of £1,800 or 10% of salary for the tax year. An employer can set a lower limit or define relevant salary more narrowly.

Matching shares

An employer can provide up to two matching shares for each partnership share. The calculator lets you choose 0, 1 or 2 for an illustrative same-share-price value comparison.

Shares leaving before 3 years

For free, matching or partnership shares where a charge arises, HMRC’s NI manual describes the employment-income/NIC amount as market value when the shares cease to be subject to the plan.

From 3 to under 5 years

Where the charge applies, the amount is the lower of market value when awarded/acquired and market value when the shares cease to be subject to the plan. After 5 years, HMRC says no Income Tax or NI is due on removal.

Worked examples

SIP Calculator Examples

Rates in these examples are explicit assumptions, not automatic classifications of every taxpayer.

Partnership shares

Salary£45,000

Contribution£1,800

Illustrative rates20% tax + 8% NI

£504 estimated saving

£1,800 × 28% = £504. This assumes the full deduction is exposed to those entered marginal rates.

Salary cap example

Relevant salary£15,000

10% of salary£1,500

£1,500 maximum

The statutory limit is the lower of £1,800 and 10% of salary, so £1,500 is used before any employer-specific lower limit.

Withdrawal after 4 years

Value when acquired£2,000

Value on removal£1,500

£1,500 taxable amount

For the 3-to-under-5-year rule, the lower of the two values is used where the charge applies. Tax and NI then depend on the applicable rates.

Why rates are entered

Why This Version Does Not Use a Single “Tax Band + NI” Preset

Employee National Insurance is calculated by earnings band and NI category, not simply by Income Tax band. For most category A employees in 2026/27, the employee rate is 8% between the Primary Threshold and Upper Earnings Limit and 2% above the Upper Earnings Limit. A deduction can also interact with more than one band.

Income Tax can likewise depend on tax code, taxable income and—where relevant—Scottish rates. Asking for the rates applicable to the amount being modelled avoids presenting a basic/higher/additional tax label as if it uniquely determined the employee’s NI rate.

Important distinctions

SIP Rules and Limitations

Four SIP share types exist

SIPs can involve free, partnership, matching and dividend shares. This calculator’s buying mode is specifically for partnership shares and optional matching shares.

Withdrawal restrictions differ by share type

Partnership shares can be taken out at any time, but free, matching and dividend shares have holding rules. Employer plan terms can also affect forfeiture.

Good-leaver relief is not a generic toggle

HMRC identifies circumstances including injury/disability, redundancy, TUPE transfer, certain company-status changes, retirement and death. Confirm that your actual event qualifies.

CGT is separate

This calculator does not calculate Capital Gains Tax. GOV.UK provides separate rules for sales and transfers of SIP shares.

Not an LTIP or option calculator

SIPs are distinct from EMI, CSOP, SAYE and employer-designed long-term incentive arrangements. Do not use these SIP calculations for another scheme.

FAQ

Share Incentive Plan Calculator FAQ

What is the 2026/27 partnership-share limit?

The statutory maximum is the lower of £1,800 or 10% of salary for the tax year. Your employer can impose a lower limit and its plan can define which earnings count as salary.

How many matching shares can an employer give?

Up to two matching shares for each partnership share bought, although a plan can offer less.

What happens if SIP shares are removed within 3 years?

Where the early-removal tax charge applies to free, matching or partnership shares, HMRC describes the employment-income/NIC amount as their market value when they cease to be subject to the plan. Other plan restrictions and forfeiture rules can also matter.

What happens between 3 and 5 years?

Where the charge applies, HMRC uses the lower of the market value when awarded/acquired and the market value when the shares leave the plan.

What happens after 5 years?

GOV.UK states that if SIP shares are kept in the plan for 5 years, no Income Tax or National Insurance is due on their value when they leave the plan. Separate CGT rules can matter when shares are sold.

Why doesn’t the calculator choose my NI rate from my tax band?

Because employee NI depends on NI category and the earnings band containing the relevant pay. In 2026/27, most category A employees pay 8% in the main employee band and 2% above the Upper Earnings Limit.

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Sources & methodology

Official Sources Used

GOV.UK — Share Incentive Plans (SIPs) — four share types, statutory limits and five-year tax treatment.
HMRC — Share Incentive Plans: a guide for employees — partnership-share deductions, matching limits, holding periods and plan restrictions.
HMRC National Insurance Manual NIM06807 — early-removal employment-income/NIC treatment and qualifying good-leaver circumstances.
HMRC — Rates and thresholds for employers 2026 to 2027 — employee Class 1 NI thresholds and rates.

About this calculator

Written and coded by Umer Farooq, founder/developer of CalcsDone. The tax rules on this page are linked to HMRC/GOV.UK sources; the calculator does not claim professional tax-adviser review or replace payroll calculations.