Check your April payslip

This post is over a year old. There may now be updates to the facts stated and the views of the author. Please read with this in mind or check for more recent articles in LIFT-Financial.

Your April pay may look much the same as March’s, but it is worth giving your payslip a close look.

If you are an employee, your April payslip is always worth checking, even if you pay little attention to the other eleven you receive over a year. The items to check include:

Salary

Many employers change pay rates from 1 April, often coinciding with the start of their new financial year. If you were notified of a pay increase in March, it is worth making sure the number on the April pay check agrees with what you were promised.

Tax code 

Your April pay check will be the first for the 2019/20 tax year and your PAYE tax code will have almost certainly changed from what was on your March pay slip. If you are entitled to a full personal allowance and have no deductions, your code number should increase by 65, reflecting the £650 increase in the personal allowance. 

If you have a company car, then it is likely to move your code in the opposite direction. For most cars (other than those with the highest emissions), the percentage of list price that is taxable rises by 3% - £300 per £10,000 of list price. A £22,000 car will therefore more than counter the rise in the personal allowance. The higher scale percentage also means a similar increase in taxable value of employer supplied fuel. In practice you might be better off paying your own fuel bills, even if your employer pays you nothing in compensation. 

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. How much will depend upon your employer’s contributions: you might see the rate increase by two thirds to 5% of band earnings (4% after basic rate tax relief). If your pay in April is lower than in March, the auto enrolment change could be the culprit.

For more insight on the tax, NICs and pension deductions from your pay and options to limit their impact, please talk to us.

The value of tax reliefs depends on your individual circumstances. 

Tax laws can change. 

The Financial Conduct Authority does not regulate tax advice.  
 

Joel Adams – Latest Blog Posts

Continue reading 'Ukraine-an update for investors during these uncertain times'

Ukraine-an update for investors during these uncertain times

Over recent weeks we have all been horrified at the situation that has developed in Ukraine. During times of uncertainty like this, stock markets generally become more volatile as investors consider the potential implications for markets and companies. Read our latest update for investors during these uncertain times.

 

Continue reading 'Ukraine-an update for investors during these uncertain times'
Continue reading 'LIFT-Financial model portfolio outlook'

LIFT-Financial model portfolio outlook

In the first couple of months of this year, markets had been building upon the momentum they had established throughout 2019. These moves, however, failed to appreciate the brewing threat the Coronavirus outbreak would have on the health of the global economy. Read more...

Continue reading 'LIFT-Financial model portfolio outlook'

Cookies help us provide our services. By using this website, you accept our privacy policy  |  Accept cookies