Getting the most out of a wage calculator
When any of us get a new job, one of the first things that come to mind is our wage. We probably already think about wages and salary as we’re looking for our next job – will it pay more? Will I be able to support myself and my family? How much will I get taxed?
The tax threshold always changes – luckily, increasingly – for those of us earning less than £10k per year, we can enjoy a tax-free wage, meaning what it says in our job descriptions, we get. But then there’s national tax, which is slightly lower in terms of both threshold and how much is taken away. Then there’s the pension schemes – whilst we can opt out if we choose to, all employers who have more than one person under them has to be part of the workplace pension scheme.
So when you look at a job description and the salary says “£18k + benefits” – what are you actually getting?
I can tell you that someone earning £16,000 on the dot comes out with just over £1,000 per month. Take a thousand pounds for each month of the year, then subtract about a quarter of your wage before taxes.
That about sums up how much you get, roughly, each month in your bank account.
This easy way is not accurate to the penny, but it can help when you’re considering a promotion or career change. When you bump up your salary from £18 to £22, you have to consider how much more you’ll be taxed – usually the increase in wage is not as much as you’d expect, and you have to consider if the extra work or responsibility is worth it.
If it’s a change in company, and one pays more than the other but your role is essentially the same, it can be tempting to see the positives straight away. But companies also operate differently, and what one job role expects might be entirely different in another. If your pay grade is a lot, look into why to really benefit from how much your wage is, to how much work you have to put in.
That being said, when we have bills, food, and rent to pay – especially if we’re on a budget – knowing exactly how much you get each month is essential. It also helps when a wage slip looks out of balance, or if you’re not sure how much you should be getting taxed. Being overtaxed can leave you short, but being under taxed is worse because you will receive a letter, often when you least expect it, demanding for the money back, so you need to ensure you know exactly what you’re getting every payday.
http://payecalculator.hmrc.gov.uk/PAYE0.aspx – This requires you to know your tax code, which isn’t helpful if you’re simply wanting to know how much a prospective job pays.
http://www.thesalarycalculator.co.uk/salary.php – You can enter a basic amount here, or you can choose more advanced options, such as pension, national insurance, and overtime. You can also check how much student finance you have to pay back for the amount you earn.
A handy calculator for minimum wage is good to check if you’re getting the right amount of pay for your age and hours worked. National minimum wage in the UK for 21-65 year olds is currently £6.50.