WDT — Labour Dividend Welfare Calculator

Purchasing power gain for a given salary under a mature WDT. Models full labour tax displacement (income tax and employee NICs), VAT displacement, and SWF energy bill reduction. Employer NICs displacement shown separately. 2025/26 tax rates; VAT and energy figures are illustrative. Source: LDW paper §2.2 and §4.4.

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Gross annual salary

£39,039

2025/26 tax rates · £10,000 – £200,000

VAT-able share of post-tax spend

55%

Illustrative — share of spending subject to standard-rate VAT

Energy bill reduction (SWF)

30%

Illustrative SWF infrastructure reduction from £1,755 Ofgem baseline

Calculating…

Current take-home

—

after income tax & employee NICs

Post-WDT take-home

—

gross salary retained in full

Purchasing power equivalent

—

in today's £ — all four channels

Purchasing power gain

—

vs current take-home

Payslip comparison

Purchasing power gain — all channels

Employer cost

Tax take at this salary — current vs WDT

Current system: 2025/26 income tax schedule and NIC rates. WDT assumes full labour tax displacement (income tax and employee NICs removed). Employer NICs also removed under WDT, reducing total employment cost.