How to work out your take home pay

Last updated 26 Apr 2019

If you’re just starting out in the world of work, or moving from part-time to full-time hours because you’ve finished school, it can be confusing trying to figure out what you’ll actually have in your pocket at the end of every week/month.

At some point soon you’ll be given a payslip that will help explain it all and give you that all-important figure, but if you would rather try and get an idea of it first then we’re here to help.

First off, you won’t be taxed at all if you don’t earn over £11,000 per year, that’s around £916.66 a month and £211.50 a week, which is £6.05 an hour if you’re working a 35 hour week (and only legal if you are 18 or under – see minimum wages below).

If you earn above that but under the basic rate of £43,000 you will pay income tax of 20% on whatever you earn above £11,000.

So if you earn £12,000 a year, you are only taxed (at 20%) on £1000 of your income, as that’s how much more than £10,600 you earn.

Another little surprise might be National Insurance contributions, which you pay if you’re:

- 16 or over

- An employee earning above £155 a week

- Self-employed and making a profit of £5,965 or more a year

Those who earn £155 - £815 a week (£672 to £3,532 a month) pay 12% of however much they earn above £155. Those lucky people who earn over £815 a week pay 2% of whatever they earn over £815.

PAYE

If you are taxed and paying National Insurance you will do so under the ‘Pay as You Earn’ (PAYE) system. Your employer takes your tax from your wages before you are paid – and then pays that tax over to HMRC for you.

National Minimum Wage

There are quite strict guidelines around the minimum employers should pay their apprentices.

The minimum that apprentices are entitled to depends on their age and length of time on a programme. Starting at £3.90 (as of April 2019) per hour – if an apprentice is under 19 or in their first year – this rises to £6.15 in the second year for those aged 18 to 20, then to £7.70 for 21-24-year-olds, and then up to £8.21 if they are over 25.

Apprentices aged 18 must be paid the standard National Minimum Wage after 12 months.

Employers are free to pay above the new wage and many do so, but employers must ensure that they are paying their apprentices at least the minimum wage.

The average weekly wage for an apprentice is actually around £200, dependant on the sector, region and apprenticeship level. For example, some higher apprenticeships can pay as much as £300-£500 per week.

Those who do get paid the minimum might be eligible to receive benefits from the government on top of their wage: it’s worth exploring the funding options out there.

Higher Apprenticeships and Degree Apprenticeships often pay higher than the National Minimum Wage and National Apprenticeship Minimum Wage; a £16,000 starting salary, for example, with regular pay reviews just like a standard employee would receive. Some HIgher Apprenticeship employers pay as high as £23,000 per year.

You can get help to calculate a week’s pay from Acas (Advisory, Conciliation and Arbitration Service) or Citizens Advice.

Image courtesy of Kelly Brito