Pay As You Earn

Updated for April 2021

The Salary Calculator has been updated with the tax rates which take effect from 6th April 2021. Some of these rates are still subject to confirmation by the relevant governments, but the calculator will be updated if any of them change.

The biggest change is the introduction of “Plan 4” student loan repayments, for Scottish students. If your undergraduate loan is administered in Scotland and due for repayment you will start repaying under Plan 4 from April 2021, even if you have been previously repaying under Plan 1. Those already repaying their loans will switch from Plan 1 to Plan 4 repayments in April. This change does not affect students in England, Wales or Northern Ireland, and nor does it affect repayment of postgraduate loans.

If you would like to see the effects of this change, and any others from April 2021, try out The 2021 Salary Calculator by choosing the “2021/22” tax year from the drop-down box.

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None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

Job Support Scheme

As I mentioned in an earlier post, the Pro-Rata Calculator had the details of the Job Support Scheme added to it. This scheme was meant to come in to effect on 1st November but at the last minute it was put on hold and the Furlough scheme was extended. At the time, I left the Job Support Scheme on the calculator in case it might be useful for people to see what the effect of it might be in the future. However, it is uncertain whether this scheme (in its current form) will ever return – so I have removed it from the calculator in order not to add confusion. The Furlough calculator is still available.

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Updates to Job Support Scheme

In light of the current situation with Covid-19, Chancellor Rishi Sunak has made a few changes to the Job Support Scheme, so the government is providing more support than they originally planned.

The minimum number of hours which have to be worked to qualify for the scheme has been reduced from 33% of normal hours to 20% of normal hours. The employer’s contribution has been reduced from 33% of the unworked hours to 5% of the unworked hours, and the government contribution has been increased to 62% of the unworked hours (from 33%). This more generous scheme makes a huge difference to small businesses who were worried they would be unable to meet the costs from 1st November. However, it does reduce the minimum amount an employee can be paid from 77% to 73% of their full salary (this is only the case if the number of hours worked is below 33%).

The Salary Calculator’s furlough calculator has been updated with these latest figures.

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New – Job Support Scheme added

Note: An earlier version of this post contained old percentages – the post was updated (on 22nd October 2020) to reflect new percentages

From 1st November 2020, the furlough scheme introduced by Chancellor Rishi Sunak is being replaced by the Job Support Scheme. This scheme is designed to encourage employers to bring employees back to work part time if possible. The Salary Calculator has been updated to allow you to estimate what effect this will have on your take home pay.

If you work 20% or more of your normal full time hours, some of your “missing” pay for the hours not worked is subsidised by the government. Your employer will pay 5% of the unworked hours, the government will pay 62% of the unworked hours, and the remaining third of unworked hours is unpaid. This does require your employer to pay you for work you are not doing, but the plan is to help people get back to work rather than losing their jobs. If you work a third of your hours, you will receive 77% of your normal pay – slightly below the 80% offered by the furlough scheme. The government contribution is capped at £1,541.75 per month.

To see what effect this might have on your take home pay, check out the Pro Rata Salary Calculator – you can either enter reduced weekly hours, or a percentage of your full time hours – just remember to tick the “Job Support Scheme” box to see what a difference it will make.

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New – Maternity and Paternity pay calculations

You may remember that a short while ago, I added a calculator for sick pay and unpaid leave. It was natural for me to consider the effects of maternity / paternity pay, too, as this can have a similar effect on your take-home pay – and Statutory Maternity Pay and Statutory Sick Pay are calculated in quite similar ways. I have now added this option to the maternity pay salary calculator.

You will notice that this is the same calculator – the Sick Pay Calculator has been expanded to include statutory parental pay as an option. If you will be taking some maternity or paternity leave, you can estimate the effect on your payslip by entering the details of your salary, days per week that you work, and how many days in the pay period you will be taking as leave. If your employer offers some of your leave at full pay then you don’t need to enter these days. If you are receiving some leave at 90% pay (you are normally entitled to this for the first 6 weeks of maternity leave) then use the % pay fields to handle those days. And for any days in the pay period that you will be receiving Statutory Maternity (or Paternity) Pay, currently £151.20 per week, use the Statutory Parental Leave field.

Important note! All calculations provided are estimates and indicative only. Different employers have different leave policies (for sick pay and for parental pay), they also calculate leave in different ways. You may not be entitled to statutory pay. The calculator does not know what you are entitled to, only what you have entered. If you are paid monthly, or have an irregular work schedule, Statutory Pay can fluctuate from pay period to pay period, which the calculator does not allow for. More information about maternity pay is available from Gov.UK.

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