Work and Managing Money
Money and Work
You will usually be paid your wages through your bank account not in cash – so make sure you have opened your own bank account. Choose carefully – get the facts.
Payslips
When you get paid your employer has to give you details of your pay, usually called a payslip.
Your payslip shows the total pay (gross pay) you have earned that week or month (depending on how often you are paid) and how much has been taken off (deductions). The main deductions are tax and National Insurance. What is left is your net pay.
Keep your payslips. You may need them. They give you a record of important information such as how much tax you have paid and will help you if you think you have paid too much tax in any year. Your employer will also give you a P60 form each April – this summarises your pay and tax payments for the year. Keep it safe.
Income tax
No matter how we feel about it we all have to pay taxes - without this money the Government couldn't pay for public services such as education, benefits, pensions, roads and the health service. The amount you pay depends on how much you earn.
If it is your first job after leaving education your employer will ask you to fill in form P46 to help work out the right amount of tax you should be paying. Everyone has a tax allowance - an amount of money they can earn each year before they pay tax.
Employers have to deduct tax directly from your pay - if you feel you are being taxed more than you should be you can contact the HMRC who will look into it and refund you any tax overpaid.
What’s a P45 form?
Employers will give you this tax form if you stop working for them. Do not lose it you will need it when you start a new job or apply for any benefits.
National Insurance
Most people have to pay National Insurance as it counts towards benefits you may be able to claim in the future such as incapacity benefit and for part of your state pension.
Most UK citizens have a National Insurance Number sent to them automatically at the age of 16. It is important to keep a record of this number as it is yours for life!
There are different levels of contribution and the amount you pay will depend on how much earn.
If you’re between 16 and 20 years old and haven’t received a National Insurance number contact the National Insurance Registrations Helpline on 0845 915 7006 for advice.
National Minimum Wage
If you are working you should be paid the National Minimum Wage from the age of 16 onwards -unless you are an apprentice aged 19 or under.
You are entitled to this whether you work full-time, part-time, on a casual basis, from home, for an agency, or on a short-term contract. There are different rates for 16 and 17 year olds which go up once you reach 18 and again when you are 21 or over. For more information, or if you think you are being underpaid, call the Pay and Work Rights Helpline on 0800 917 2368 or see their website.
Still looking for work?
Under 18s do not usually get any benefits except in exceptional circumstances such as having caring responsibilities, or unable to live at home, for example.
If you are over 18 Find out more about benefits and even apply online if you are 18+
Benefit rules are complex and dependent on your individual circumstances so seek help if you have money worries. Talk to your Personal Adviser to find out more.
