Job Hunter Helpful Tips
Helpful Tips for Employees
We have provided some helpful tips and pointers on employment issues in this section.
These are helpful tips from helpful people. It is not legal advice and please do not treat it as such!
You work hard all month and then the government comes along and takes their share! Unfortunately, this is life!
This section is designed to help you understand what taxes you will pay. For a calculator that helps you work out your take home pay quickly we recommend this one.
The more info you have the more accurate it will be!
There are more taxes than you can shake a stick at but the most common for employees are:
- National Insurance Tax
- Income Tax
Please note – this information is for employed people only. Self employed individuals should consult their accountant about their tax position.
National Insurance Tax
It is important to point out that not everyone pays NI at the same rate but most people will pay it as follows:
1st £8,060 of annual earnings are free from NI tax
Annual earnings between £8,060 to £43,004 are subject to 12% NI tax
Annual earnings above £43,004 are subject to 2% NI tax
These bandings and rates are subject to change every year. The governments revamped website is very helpful and (finally) easy to understand. Check it out here.
Income tax is also based on bands of earnings. Unfortunately income tax is in addition to NI tax, not instead of.
Currently the 1st £11,000 of your annual earnings are free from income tax.
Annual earnings between £11,000 and £43,000 are subject to 20% income tax.
Annual earnings between £43,000 and £150,000 are subject to 40% income tax.
Earnings above £150,000 are subject to 45% income tax.
More information from the government here.
You may also see deductions for:
- Student loan repayments
Student loan repayments are simply that but pensions are a lot more complex to explain and each case will be different. Workplace pensions will affect the vast majority of the employed workforce within the next 18 months. Find out more here.
Your P45 is a document given to you by your employer after you have left them. It is a statement of the tax you have paid whilst employed with them during the tax year. Tax years run from April 5th to April 4th of the following year.
A P45 is important because your new employer cannot pay you correctly without it! A P46 can be used as a substitute but HMRC will have to make assumptions about your tax position.
Do you expect HMRC will under or over charge you? In our experience it is almost always the latter! Although you will receive overpaid tax back via an adjustment to your pay it is not ideal so make sure you look after your P45.
The good news is that every worker is entitled to holiday pay!
A full time employee is entitled to a minimum of 20 days per annum (plus bank holidays).
The actual calculation for holiday pay has become a little more complex in recent years. All an employees pay needs to be taken in to account when calculating holiday pay; including, overtime and commission.
Temporary workers have more rights than most are aware of; particularly around holiday and sick pay.
There are many things to consider, particularly after 12 weeks of an assignment when most temps or agency workers will be entitled to the same treatment and benefits as permanent staff.
The governments website tells you all you need to know about the rights of an agency worker. Click here.