► Your Pay
► Minimum wage
► Pay slips
► Income tax
► PAYE (Pay as you earn)
► NI (National Insurance)
► Cash-in-hand
►Your Pay
When you start work your employers will tell you how you will be paid and how often. E.g. every four weeks or on the last day of the month. Your first wage may be paid in arrears. This means you will have to work for a week or month before you get first pay.
►Minimum Wage
If you start a job you will be entitled to the National Minimum wage. There are different minimum wage rates for different groups of workers.
Rates from 1 October 2010
From 1 October 2010 the National Minimum wage rates are:
£5.93 - the rate for workers aged 21 and over
£4.92 - the 18-20 rate
£3.64 - the 16-17 rate
New minimum wage of £2.50 per hour for apprentices who are either under 19 or 19 or in the first year of their apprenticeship.
Rates from 1 October 2011
From 1 October 2011 the National Minimum wage rates are:
£6.08 - the rate for workers aged 21 and over
£4.98 - the 18-20 rate
£3.68 - the 16-17 rate
New minimum wage of £2.60 per hour for apprentices who are either under 19 or 19 or in the first year of their apprenticeship.
►Pay Slips
In almost all jobs you will be given a pay slip which sets out your earnings and deductions. It will contain:
► Gross wages – this is the total you have earned before deductions’
► Fixed deductions – thing you pay out such as Union Subscription
► Variable deductions – payments for Income tax or National Insurance which are based on your earnings.
► Net wage – the amount that will be paid to you after deductions
►Income Tax
When you start your first job your employer should give you a tax form P46 to complete. Your employer uses this to tell the tax office that you have started work.
►Pay as you Earn (PAYE) System
Most people pay income tax through the PAYE system. Your employer deducts the correct amount of tax from your wages and passes it on to HM Revenue and Customs.
You will have a tax allowance that is an amount you earn before pay up tax; your allowance will depend on your personal circumstances.
To check your tax allowance visit HMRC website.
Your employer should give you an annual P60 to show how much tax and National Insurance you have paid during the previous financial year.
►National Insurance
NI is a scheme in which employees make contributions from their earnings to a national fund which benefits are provided for certain events such as unemployment, sickness, maternity and retirement.
► The payment of NI benefits from the NI fund depends on the contributions you have paid into the scheme.
► Some of your contribution goes towards the cost of the National Health Service (NHS).
►Cash-in-Hand
Some employers may offer to pay “Cash-In-Hand”.
In these cases you will probably not receive a pay statement and it is likely that your employer is not paying tax or National Insurance on your behalf.
It is important that you check that your tax and National Insurance is being paid otherwise you may have helped your employer to break the law!
