Starting Your First Job in Working

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Understanding your payslip, national insurance and paying taxes...

About to start your first job? Here are some things you need to know to help put your mind at rest.

Nearly everyone gets a bit nervous before they start a new job. It always takes a little time to learn and to find out where everything is. Most people know what it’s like and will help you find your way around the workplace. Don’t be afraid to ask questions and if you are given instructions which you don’t understand, say so. It’s best to have things clear in your mind rather than making mistakes.

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Your Contract 

All employees should get a written contract of employment stating the terms and conditions of employment (how many holidays you get per year, how much you will get paid, how much notice you need to give if you decide to leave the job, how many hours to be worked in a week). You should be given this within two months of starting a job.

Keep all letters or papers an employer gives you. Even if you don’t get anything in writing, you still have rights as an employee.

Your rights

Always check what is written in a contract before signing. It can be difficult, but always ask to take your contract away to look at it - e.g. if you are asked to sign at an interview. Make sure that you are getting a good and fair deal.

You can get an employment expert to check it over by taking it to your local Citizens Advice Bureau.

It is important that you get paid the amount agreed at your interview or in your contract of employment. When you start work you should give your employer your National Insurance number and your P45 (if you’ve had a job before).

P45's

A P45 is a certificate given to you once you leave a job, providing certain tax details to be passed to your next employer. 

If you're starting your first job and don't have a P45, your employer will give you a P46 to fill in and sign. Your employer will allocate a tax code and work out the tax due.

It is not unusual to have ‘lying time’. This means you will not get paid until the end of your second week/month. This money is held by the employer as security in case you leave without working notice (which is in your contract and could be anything from one week to two months). It will be paid to you at the end of your time with that employer.

Your payslip

You are legally entitled to an itemised payslip which shows the breakdown of your gross pay (the total amount of pay before everything gets taken off), the tax you pay, your National Insurance contributions, deductions for a pension and/or union, and finally your net pay (the amount you are left with).

Remember that it's the net pay that goes in to your bank account or into your hand so don't think you're rich as soon as you see your gross pay!

Wages

If you are paid hourly, make sure you are paid fully for the number of hours you work. It’s worth keeping a note of all the time you’ve worked in a week, that way you can accurately check if you’ve been paid the correct amount of hours.

Make sure you are getting the right wage for your age by finding out what the National Minimum Wage is. 

If you don't think you have been paid correctly then speak to your manager/boss and they should be able to help you out.

Tax

You can earn a certain amount of money before the government taxes you. The tax allowance for a single person is £6,475 in this tax year.

A tax code is used by your employer or pension provider to calculate the amount of tax to deduct from your pay or pension. If you have the wrong tax code you could end up paying too much or too little tax.

Get further information about tax allowances and tax codes from your nearest Citizens Advice Bureau or the handy DirectGov Beginners Guide to Tax website.

If you earn over a certain level you have to pay National Insurance, which comes off your pay at the same time as income tax. Both of these deductions go towards paying for, amongst other things, education, benefits and the NHS.

To get clued up on National Insurance take a look at the Direct Gov website.

And check out the handy hints in the video below from ACAS.