Income types

When keel asks you to confirm income, it offers three types: regular income, pre-tax income, and other income. The classification is by tax treatment and reliability, not by where the money came from — and it determines how each payment counts toward what your household can actually spend.

You'll see the same three options everywhere income is classified: the import review, the review queue, and the transaction's detail page. keel learns your choice per merchant, so future income from the same source is classified automatically.

How it works

The three types

• Regular income (post-tax) — salary, rental income, dividends, post-tax business draws. The money is already taxed; what arrived is what you can spend. This is your budgetable baseline, used for the spendable card's 3-month average.
• Pre-tax income — freelance payments, client invoices, sole trader revenue. Tax is still owed on it, so keel includes it in your spendable figure only after deducting estimated tax.
• Other income — gifts, tax refunds, irregular one-off payments. Real money, but not part of your regular income baseline, so it never inflates what keel thinks you reliably earn.

Why only three

What matters for household budgeting is behaviour: is this money reliable, is tax still owed on it, and should it set expectations for next month? Salary versus dividend is a distinction for HMRC, not for your budget — both are post-tax money landing in your account, so both are simply "regular income". Three types cover every budgeting decision keel needs to make without turning income confirmation into a tax form.

How types feed the spendable income card

Once you've classified at least one income transaction, your dashboard shows a "What your household can spend" card:

• Regular income (3-month average, or fewer months if you have less data)
• Plus pre-tax income for the current month, after estimated tax
• Minus fixed commitments (your Housing & Utilities budget)
• Minus variable budget allocations
• Equals what you can actually spend

Misclassifying matters here: a one-off payment marked as regular income would inflate your baseline for three months, and pre-tax income marked as regular would overstate spendable money by the tax you still owe.

The estimated tax rate

For pre-tax income, keel deducts an estimated tax rate — 30% by default, an approximation of UK basic rate plus National Insurance. You can change it in your profile settings (the slider appears when your employment type is self-employed or mixed).

The figure is always labelled as estimated. keel classifies income and sets money-aside expectations; it does not calculate your tax. Check with your accountant for actual figures.

Why it works this way

• Classification, not calculation. For limited company directors, income arriving in personal accounts is already post-tax — the problem keel solves is noise (salary versus one-off versus reimbursement), not gross-to-net conversion.
• Reliability drives budgeting. Your spendable baseline should only include income you can count on. One-off money is welcome but shouldn't raise next month's expectations.

Good to know

• Interest on savings accounts isn't income at all — it grows your savings balance and is classified under Savings & Investments. See Transaction types explained.
• Money arriving from your own business might be a reimbursement rather than income — keel asks when it can see an outstanding balance. See Business accounts.
• Income can also be tagged to a specific business; keel offers the picker automatically for pre-tax income, since that's the type most likely to come from one of your businesses.

FAQ

Which type is my salary? Regular income. It's post-tax and reliable.

I'm a sole trader — what are client payments? Pre-tax income. Tax is still owed, so keel deducts your estimated rate before counting it as spendable.

What about a tax refund or a cash gift? Other income. It counts in the month it arrives but doesn't change your regular income baseline.

Why doesn't keel separate dividends from salary? Because it doesn't change what your household can spend. Both are post-tax money in your account — the distinction matters to HMRC, not to your budget.

Is the 30% tax estimate right for me? It's a starting point, not advice. Adjust it in your profile to match your circumstances — higher-rate taxpayers will want it higher.