Earning money

Your income explained

As you search for your first job, you might find yourself drawn to a position with an impressive annual income. Before jumping for joy, do you know what this boils down to for each week or month? It’s also vital that you’re aware that your ‘gross’ salary refers to the sum before deductions like National Insurance, Income Tax and any work scheme contributions (such as pensions) and your ‘net’ income is the amount you’re left with afterwards. Unless you have the opportunity to work overtime or earn a bonus, this is what you’ll have to live off until the next payday.

Also find out where you stand with holiday and sick pay. This can vary from job to job, and may not kick in until you’ve completed a probationary period. Your employer may also make contributions to your pension, as well as offering other benefits such as gym membership or life insurance. Don’t be shy to ask if these are benefits your employer offers and how they affect you. If anything, it’ll show you’re switched on about your working life.

Finally, be aware that in the UK the Minimum Wage Act protects you from being underpaid. This means your employer has to pay you a minimum hourly rate. The rate increases as you get older, but you’re protected by the law from the age of 16.

For more information about managing your money, check out whataboutmoney.info.

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