PolicyEngine Macro

model 01 — tax-benefit microsimulation · pe-microsim · UK · US · hosted

Calculate taxes and benefits.

Compare current law with a reform for a UK or US household, or estimate population-wide revenue and distributional effects.

01 — what it is

Statute as code, at household resolution.

pe-microsim: 1p on the UK basic rate, our static costing vs the HMRC ready reckoner (£bn/yr) Grouped bar chart in billions of pounds per year. PolicyEngine's static costing of a 1 percentage point rise in the UK basic rate of income tax, against HMRC's Direct effects of illustrative tax changes ready reckoner, June 2025 vintage. For the basic rate +1pp, 2026–27 group, ours is 6.46 against HMRC’s 6.90, a deviation of -6.4%. For the basic rate +1pp, 2028–29 group, ours is 6.92 against HMRC’s 8.20, a deviation of -15.6%. The 2028–29 emulator figure is interpolated between the scored endpoints £6.46bn in 2026 and £7.38bn in 2030. 0 2 4 6 8 10 6.46 ours 6.90 HMRC basic rate +1pp, 2026–27 6.92 ours 8.20 HMRC basic rate +1pp, 2028–29
£bn/yr. The microsimulation’s static costing of a 1pp basic-rate rise, against HMRC’s Direct effects of illustrative tax changes (June 2025 vintage). The 2028–29 figure is interpolated between the scored endpoints. Full evidence: validation.

The package encodes UK and US tax-and-benefit rules as parameterised statute and computes every variable for a household you describe — UK: income tax, National Insurance, Universal Credit, Child Benefit, Pension Credit; US: federal and state income tax, payroll tax, SNAP, TANF, EITC, CTC, SSI and Social Security. A reform is a flat dict of parameter path → new value, identical at household and population level.

The limit is structural: it cannot answer GDP, inflation, interest rates or macro feedback. Its costings are static, and the macro members of the suite exist to supply what it cannot see.

The four packages underneath

policyengine-core (the simulation framework, forked from OpenFisca), policyengine-uk and policyengine-us (the statutory rules per country), and policyengine — the analyst-facing package covered here, adding dataset management, reforms, structured outputs and version-pinned release bundles for reproducibility. See also the code, the methodology, and how far to trust it.

Score a reform end to end →

with the microsimulation

Every bridge in the suite starts or ends here.

→Connection. This is the microsimulation: the static-costing input to the OBR emulator, the incidence engine for the SVAR, FRB/US, and HANK bridges, and both ends of the OLG two-way loop.
→Worked example. 1p on the basic rate: £6.46bn direct yield in 2026 with decile-by-decile incidence, before the macro feedback is added — the full chain on score a reform.
→Validation. Checked against implemented legislation, rule by rule; household maths exact, population estimates add survey error.
→Results. Household and population reform impacts from any connected client or at policyengine.org.