Wages or salary may be shown as:

o      hourly rate (p.hr.)

o      weekly rate (p.wk.)

o      yearly rate (p.a. – short for ‘per annum’)

This does not tell you when you get paid, just how much you would get. If a salary is shown for a whole year, you will probably be paid one twelfth each month. 

What is deducted from your pay?

Gross pay is how much you get before any deductions.

Net pay is how much you get after deductions.

Depending on how much you earn, the employer has to take away national insurance and tax. This money goes to the government. If you are in a company pension scheme, the employer will take off money for this as well.

Tax

Most single people can earn just over £5030 each year before they pay tax. If you are in employment, you will get an allowance of this every time you get paid. So, if you get paid at the end of each month, you will be allowed £419 before you pay any tax.

On the next £2150 you earn you pay 10% tax. Then most people pay 22% tax on the rest of their earnings. People have to pay 40% tax on anything they earn over about £40,480.

When you start work you will get a tax code. You might be put on an emergency tax code until your proper one is worked out. If you end up paying too much tax, you will get this back.

Students working during the holidays may not have to pay tax if they do not expect to earn more than £5030in a year. You have to fill in a form which you can get from your employer if you are not going to pay tax.

If you are self-employed you will have to sort out your own tax.

National insurance

You should get a national insurance number around your 16th birthday. If you don't phone 0191 225 5670.

You do not pay national insurance until you earn at least £97 per week (£5044 per year). Your employer also has to pay national insurance for you.

Note, things are different if you are self-employed.

What is the minimum wage?

There is a national minimum wage. It does not cover 16 and 17 year old apprentices.  There are some other exceptions. Generally the following rates apply from October 2006: 

£3.30 hourly for 16 and 17 year olds

£4.45 hourly for 18-21 year olds

£5.35 hourly for 22 year olds and older

Rates from October 2007

£3.40 hourly for 16 and 17 year olds

£4.60 hourly for 18-21 year olds

£5.52 hourly for 22 year olds and older

These figures change, usually every year. So check the latest at www.dwp.gov.uk/employers

How much do Apprentices get paid?

An Apprenticeship is a training programme that combines on the job training with the chance to get qualifications relating to your job.

·     Minimum Apprenticeship rate is £80 per week.

·     Average Apprenticeship take home pay is £137 per week.

·     Average 16-18 year old apprentice take home pay is £114 per week.

·     Average male apprentice took home £153 per week.

·     Average female apprentice took home £113 per week.

·     Average take home amounts per week for each sector:

Electro-technical                      £183

Engineering manufacturing         £167

Customer service                     £161

Hospitality                              £158

Construction                           £141

Motor industry                        £136

Health, social care                   £130

Business admin                       £126

Retail                                    £123

Early years                              £95

Hairdressing                           £90

These figures are for employed apprentices.

The average Apprenticeship take home pay is £137 per week.

How much do young people earn round here?

Download the document to find out.