WORKERS who received a pay rise in April should be aware of a helpful tool which can help calculate their new take home pay.
This month the Government hiked the –the minimum earnings for employees who are aged 21 and over – by 6.7%.
The hourly rate has increased from its previous figure of £11.44 per hour to£12.21 per hour, and means you could see an annual boost of £1,400.
So, for example, if you were employed full-time and worked a 35-hour week, you could see your annual salary increase to £22,222.
But this is what your earnings are before tax; what you take home after reductions will be different.
If you received a pay rise this April then it may be worth figuring out what your take home pay is.
Money Saving Expert,the website owned by Martin Lewis, has an Income Tax Calculator, which can help with this.
You will need to have information like what your yearly salary is before tax otherwise known as your gross income.
You also need to enter information like your pension contributions, if you make any and what you repay in student loans.
Once you enter the information it calculates what you will actually make in a year.
So if you earned £22,222 a year you would actually take home £19,519 a year after tax deductions.
That's because over the year you'll pay £1,930 income tax and £772 in
According to the MSE website, you would have to pay £1,627 into your pocket a month.
Everyone who is employed in the UK and makes over £12,570 a year has to pay tax.
The most common you will see on your payslip are Income Tax and National Insurance contributions.
The money is taken off your wages and goes towards funding national services or certain benefits such as the
How are you taxed?
How much you have to pay is generally based on your earnings, with people making less not as heavily taxed.
Income tax is split into four bands which are as follows:
- Earnings of £0 to £12,570 a year– 0% (no tax)
- Earnings of £12,571 to £50,270 – Basic rate: 20%
- Earnings of £50,271 to £125,140 – Higher rate: 40%
- Earnings of Over £125,140 – Additional rate: 45%
Meanwhile, how much you pay in National Insurance is based on your weekly pay.
The rates are as follows:
- Earnings of £0 to £242 a week: 0%
- Earnings of £242.01 to £967: 8%
- Earnings of over £967: 2%
For example, if you earn £1,000 a week, you pay nothing on the first £242, £58 on the next £725, and 66p on the remaining £33.
If you don't work you can apply for
Minimum wage shake-up
There are currently two different minimum rates all workers are supposed to get across the UK – and the National Living Wage.
The (NMW) is the minimum pay per hour for workers who have left school.
As it stands, those who have left school and are aged under 18 must get a minimum of £6.40 an hour.
Meanwhile, the is the minimum wage for those over 21 and is slightly higher.
It was previously only available to those over 23, but this was adjusted to 21 and over in November 2023.
