The new tax year has meant for some big changes to your payslips. It is worth checking out the differences in your payslips this month! Amongst the culprits to have changed this month includes your salary, tax codes, national insurance contributions and pension contributions.
Salary
As from 1 April employers are likely to change their pay rates, particularly with the increase of minimum wage. With the start of the new financial year, it is time to check your payslips if you are earning minimum wage or been notified of a pay increase to ensure you have received the correct amount.
Tax Codes
The new tax codes are upon us and your April paycheck will be the first to reflect this. If you are entitled to the full personal allowance and have no deductions, your code number should increase by 65, reflecting the £650 increase in personal allowance.
National Insurance contributions (NICs)
The primary threshold (that is, the starting point) for NICs rises by £4 a week while the upper earnings limit (the top level of earnings on which you pay full 12% NICs) jumps by £70 a week. As a result, if your annual earnings are more than £46,600 a year, you will be paying more NICs from April. If you earn over £50,000 a year, your extra NICs will be just over £28 a month.
Pension Contributions
These are generally linked to salary, although not necessarily your full pay, so should increase if you have an April pay increase. If you are in an automatic enrolment pension scheme, your contributions are usually based on “band earnings”, which were £6,032–£46,350 in 2018/19 and are £6,136–£50,000 in 2019/20. The contribution rate will rise, too. The minimum contribution rate is now 8% (compared to 5% last tax year) with at least 3% coming from your employers, meaning your contribution rate could be increased as much as 2%. If your pay in April is lower than in March, theauto-enrolmentt change could be the culprit.
The new tax year has meant for some big changes to your payslips. It is worth checking out the differences in your payslips this month! Amongst the culprits to have changed this month includes your salary, tax codes, national insurance contributions and pension contributions.
Salary
As from 1 April employers are likely to change their pay rates, particularly with the increase of minimum wage. With the start of the new financial year, it is time to check your payslips if you are earning minimum wage or been notified of a pay increase to ensure you have received the correct amount.
Tax Codes
The new tax codes are upon us and your April paycheck will be the first to reflect this. If you are entitled to the full personal allowance and have no deductions, your code number should increase by 65, reflecting the £650 increase in personal allowance.
National Insurance contributions (NICs)
The primary threshold (that is, the starting point) for NICs rises by £4 a week while the upper earnings limit (the top level of earnings on which you pay full 12% NICs) jumps by £70 a week. As a result, if your annual earnings are more than £46,600 a year, you will be paying more NICs from April. If you earn over £50,000 a year, your extra NICs will be just over £28 a month.
Pension Contributions
These are generally linked to salary, although not necessarily your full pay, so should increase if you have an April pay increase. If you are in an automatic enrolment pension scheme, your contributions are usually based on “band earnings”, which were £6,032–£46,350 in 2018/19 and are £6,136–£50,000 in 2019/20. The contribution rate will rise, too. The minimum contribution rate is now 8% (compared to 5% last tax year) with at least 3% coming from your employers, meaning your contribution rate could be increased as much as 2%. If your pay in April is lower than in March, theauto-enrolmentt change could be the culprit.