If you are having problems with any employment
issue, contact an advice centre such as a Citizens
Advice Bureau. They will be able to help, or will put you in
touch with a specialist who can.
If you are employed by someone to do
a job you get a wage. The money is usually
paid directly into a bank, but sometimes
may be paid by cheque or in cash. Wages
are usually paid to you weekly or monthly.
The wage before any money is taken away is called
the gross wage.
You may be losing out by not getting this
extra money. See an advice centre, such as the Citizens
Advice Bureau, or phone the tax credits help line (Telephone
0845 6095000).
Activity: Understanding your pay
slip -
you can move over it for a description of each item of importance.
Your employer should also give you a pay slip. Pay slips can look very
different to each other but should show any money that has been taken
off or added on to your pay. Keep your pay slips safe – you will
need them to claim certain benefits as well as to see if you have been
paid the right amount.
Working out tax Everyone is allowed to earn a certain amount of money
before they have to pay tax. This amount is called a personal
tax allowance.
The personal
allowance for a person under 65 is
currently £6,035.
The allowances change every year. The change is
announced in the budget.
People over 65,
those who are married and were born
before 1935, and people registered
blind may have different personal allowances.
Click here for further information
- IncomeTax
To help you understand how tax is worked out look
at this example.
1) Take your personal allowance away from
your gross wage
Example – Mr Dhesi
earns £17,950 before tax.
Mr Dhesi has to
pay tax on £11,915 of his wage.
The amount of
tax you pay goes up the more you earn.
These different tax amounts are called
bands.
Between £0
and £34,800 over your allowance
you pay 20% tax.
For above £34,800
over your allowance you pay 40% tax.
2) Calculating
tax
Remember that
Mr Dhesi had £11,915 that he
had to pay tax on.
This is less than £34,800 so
the 40% band doesn't apply.
He has to pay
20% tax on this amount
Mr Dhesi has to
pay £11,915 x 20% = £2,383.00
tax.
Mr Dhesi pays £2,383.00
in tax.
Activity: Try working
these out for yourself.
Using £6,035 as the
personal allowance, how much tax should
these people pay?
Now try it with your earnings
- remember to use our
pop-up calculator if you need some help with the maths! Remember,
it's at the top of every page if you ever need a handy calculator.
