Money Matters Key Stage 4 & 5 Payslips

It’s just a job… ( average yearly salaries in UK) £211, 068 High pay ( £) £67, 060 £50, 526 Between £20,000 and £51,000,000 £28,00 High skill /qualifications Low skill /qualifications REF 4A: The average salary of an actor varies considerably. In the UK only 1 in 20 actors earn over £20,000 but some actors earn in the millions. Daniel Radcliffe’s average hourly salary is £207,000! On each click the lowest to the highest paid will appear £25,962 £23,000 £22,000 £22,679 £15,000 Low pay ( £)

Payslips REF 4B

What’s on a payslip Gross Pay – what you earn before any deductions Tax Code – tells you your tax allowance for the year Tax Period – the tax year starts on April 6th and runs until 5th April the follow year. So the first payslip after the 6th April would be tax period 1 Deductions: Tax – 20% on earnings over £10,000 per year NI – 12% of earnings over £7949.88 per year Net Pay – Is the amount paid to you after deductions are taken from the Gross Pay. REF 4B

Income Tax Personal Allowance: up to £10,600 tax free Earnings over that amount are taxed at: £0-£31,785 – 20% £31,785 - £150,000 – 40% Over £150,000 – 45%

Morris is a garbage collector…. He earns £18,000 per year Personal allowance of £10, 600 £18,000 – 10,600 = £7,400 Morris will be taxed on £7,400 of his earnings £7,400 falls into the 20% tax band £7,400 @ 20% = £1,480 So Morris will pay £1,480 tax per year Annual Net pay: £18,000 - £1480 = £16,520

Megan is a hairdresser…. She earns £22,679 per year Personal allowance of £10, 600 £22,679 – 10,600 = £12,079 Megan will be taxed on £12,079 of her earnings £12,079 falls into the 20% tax band £12,079 @ 20% = £2,415.80 So Megan will pay £2,415.80 tax per year Annual Net pay: £22,679 - £2,415.80 = £20,263.20

Mike is a doctor…. He earns £50,526 per year Personal allowance of £10, 600 £50,526 – 10,600 = £39,926 Mike will be taxed on £39,926 of his earnings £31,785 falls into the 20% tax band £31,785 @ 20% = £6,357 £8,141 falls into the 40% tax band £8141 @ 40% = £3,256.40 So Mike will pay £9,613.40 tax per year Annual Net pay: £50,526 - £9,613.40 = £40, 912.60

For earnings over £3,532 a month you pay 2% National Insurance… If you earn between £672 to £3,532 a month , you pay 12% National Insurance… For earnings over £3,532 a month you pay 2% National Insurance… Does Morris pay National Insurance? Work out his monthly net salary - £18,000 /12 = £1500 Yes he does. He earns more than £675 a month. He pays 12% on monthly earnings over £672 so… £1500 - £672 = £828 £828@12% = £99.36 Morris pays £99.36 National Insurance a month

Does Megan pay National Insurance? Work out her monthly net salary - £22,679 /12 = £1889.92 Yes she does. She earns more than £675 a month. She pays 12% on monthly earnings over £672 so… £1889.92 - £672 = £1217.92 £1217.92@12% = £146.15 Megan pays £146.15 National Insurance a month

Does Mike pay National Insurance? Work out his monthly net salary - £50,526 /12 = £4210.50 Yes he does. He earns more than £675 a month. He pays 12% on monthly earnings between £672 and £3532… £3532 - £672 = £2860 £2860 @ 12% = £343.20 He pays 2% on monthly earnings over £3,532 £4,210.50 - £3,532 = £678.50 £678.50 @ 2% = £13.57 Mike pays £356.77 National Insurance a month

What do these people have in common?

Current minimum wage rates…

Zero Hour Contracts? Stats Recent research by the ONS has found that: Over 801,000 people are on Zero Hour Contracts, that’s 2.5% of the UK workforce. Zero Hour workers are more likely to be: Women or Students in full time education aged below 25 or above 65 Employees on zero hour contacts worked an average of 25 hours a week Over a third of people wanted to work more hours

Who uses zero hour contacts the most? Retail industry Education sector Fast food and restaurant industry Hotel industry Health sector

Zero Hour Contracts? Pros Cons Workers Flexibility – you can turn down a shift You will have time to search for other work during free time More jobs to apply for – lots of businesses use zero hour contracts Improve your CV May turn into a permanent position Workers You are not guaranteed work or a fixed income You won’t be entitled to benefits such as a pension or redundancy You will not know when you’ll work as you won’t have set hours If you turn down a shift your employer may not use you again

Today we have learnt… That there’s a difference between gross and net pay Income tax and National Insurance contributions are deducted from our monthly pay The more you earn, the more tax you pay