MARTIN Lewis’ MoneySavingExpert has created a calculator to help you work out if you’re set to get a pay rise within days.
Millions of workers are set to take home more money in next month’s pay packet – now you can see if you’re one of them.
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The pay boost is because of a change being made to National Insurance.
This is a tax which is automatically taken out of your salary if you earn above a certain amount.
It goes towards the cost of everything from paying State Pension to Maternity Pay and Jobseeker’s Allowance.
Currently, you pay National Insurance on earnings above £9,500.
But from July 6, this threshold will increase £12,570.
It means millions of workers will get to keep more of their wages each month.
But, to add to the confusion, it comes just weeks after the National Insurance tax rate was hiked from 12% to 13.25%.
So you may have noticed that your salary has been slightly lower for the last couple of months.
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That makes working out exactly how this next change will affect you a little complicated.
As a general rule of thumb, anyone earning around £35,000 or less should benefit from this next change, which means your take-home pay should go up from July.
Luckily, there are a couple of online tools that can do the maths for you.
MoneySavingExpert has created a calculator, which shows how the change will affect you – and how much tax you’ll pay over the year.
You’ll need to enter your pre-tax salary, age bracket and a couple of other details.
According to the tool, someone earning £20,000 in the current tax year will have take home pay of £17,440.
Over the year, this worker would pay £1,486 in income tax and £1,073 in national insurance.
Your current monthly take-home pay would be £1,431 – but after the change to National Insurance, that would rise to £1,461.
That means you’ll be better off to the tune of £30 a month – or around £360 a year.
But not everyone will enjoy a pay boost.
A worker with a salary of £36,000 will take home LESS after the threshold changes in July.
The MSE calculator showed that this worker would see their take-home pay drop from £2,321 a month at the moment, to £2,351 from July.
Of course, these are just indications – the actual amount you will take home will depend on other factors such as whether you pay into a pension.
MoneySavingExpert’s isn’t the only calculator you can use – the Government has it’s own version too.
While you’re checking your salary – have a look at your tax code. You could be overpaying if it’s not correct.
And marriage couples could reduce the amount they pay in tax by using the Marriage Allowance.
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