Unit One, Topic 3 Flashcards
What are earnings?
A common name for wages or salaries.
What is the difference between a wage and a salary?
Wages describe hourly rates, and salaries each dictate yearly earnings.
What does PA mean?
Per annum.
What is gross pay?
Pay before reductions througuh taxation and other charges.
What is net pay?
Pay after sall deductions are made (sometimes referred to as take-home pay.)
How long is a payment period?
Usually a month, or in some circumstances a week.
What are pay slips?
A pay slip shows details of pay earned, and the amount deducted.
What are some key elements to the pay slip?
The employer’s name, the date on which the earnings will be paid, the payment period, and the payment method.
What is national insurance?
All employees have to pay national insurance, and it used to pay things such as the job seeker’s allowance, and the state pension. The amount is based on your weekly pay, and the hours for which you work.
What is your NI number, and which elements are involved in its composition?
You have a unique NI number, which keeps track of your taxes. It’s made up of two letters, followed by 6 numbers, and a letter.
How do you calculate NI?
If you are employed, you pay class one insurance, which is 12% of your weekly earnings, from £183 - £962. Over that amount, 20%.
What is income tax?
It is a tax on income: the more you earn, the more you pay (except bloody billionaires).
What is the personal allowance for income tax?
Around £12,500.
How much more does the blind person’s allowance account for prior to tax? uwu
An additional £2,500.
What is the marriage allowance?
The marriage allowance allows lower-earning married or civil partners to transfer up to 10% of their personal allowance to their spouse.
What is a tax band?
An income grouping, paying different proportions towards the government.
What are the different tax bands?
The basic rate band, to £37, 500 (20%)
The higher rate band, from £37,501, to £150,000 (40%).
Above £150,000, the additional rate (45%).
How does your employer use the tax code?
The employer uses the tax code to calculate how much tax to deduct from your pay.
Are taxes rounded up or down?
Down.
Who uses tax codes?
HMRC (Her Majesty’s Royal Customs)
What is overtime?
The amount of time that someone works beyond normal working hours. This is generally over the usual rate.
What is sick pay?
Played by an employer on the behalf of the government, sick pay is an obligatory feature of a job.
What is statuatory sick pay (SSP)?
When the government pays for the sickpay of the long-term ill.
When are people permitted SSP?
When they are:
- Sick for at least four consecutive days.
- Earn above a pre-determined amount per week.
- Have told your employer that you are sick.
How are student loans paid?
Through PAYE (pay as you earn).
Who does the National Minimum Wage apply to?
People aged 16 to 25.
What is the legal rate for people over 25?
£8.72 an hour.
