The information below has been provided by the Money Advice Service.
Whether it’s a part-time job during your studies or your first full-time job after leaving education, earning your own money is extremely rewarding. How you’re paid for your work can vary considerably – we look at the different ways employers pay their staff.
How will my pay be worked out?
The money you get paid for work can be calculated in a number of different ways by your employer.
This is the minimum pay per hour that any worker should receive. The amount varies depending upon age and whether you’re in an apprenticeship or not. There is no minimum wage for workers younger than the compulsory school leaving age.
(Source: GOV.UK & BBC, March 2015)
Check to see if you’re receiving the minimum wage using the GOV.UK minimum wage calculator
How you get paid at work
Some employers may pay you in cash, but the most common way of receiving your wage is through your bank account. This has the major benefit of being safe and secure.
One other major advantage of being paid directly into your bank account is that your employer should enrol you into a scheme called Pay As You Earn (or PAYE for short). This means that your employer automatically takes away any Income Tax and National Insurance contributions from your wage before it’s sent to your bank account, meaning you don’t have to worry about making tax payments.
Find out more about Income Tax and National Insurance payments
Other work benefits
Employers may provide other benefits in addition to your pay, for example:
- health insurance
- company car
- gym membership
These are called ‘benefits in kind’ as you’re not getting extra cash, but are getting something you would normally have to pay for. You still have to pay tax on many benefits in kind.
If you take a workplace pension out, every month a small part of your wage will be paid into your pension. The benefit of a pension is that your employer will also make a payment each month. Also, any payments you make into your pension are tax-free, reducing the amount of tax you pay on what you earn.
The government has introduced a new rule which means employers will automatically place workers into a workplace pension scheme.
Find out more about automatic enrolment and workplace pensions.
Read more on what your options are if you are aged 21 and under.
This article is provided by the Money Advice Service