National Living Wage & Pension Contribution Increase – April 2019

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National Living Wage & Pension Contribution Increase – April 2019

Your April pay may look much the same as March’s, but it is worth giving your pay slip a close look. If you are an employee, your April pay slip is always worth checking, especially this time due to changes in legislation.

Salary

The national living wage, the statutory national minimum wage for those aged 25 and over, will increase by 4.9% from 1 April 2019, from £7.83 to £8.21.

Also, some 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 was agreed.

Pension contributions

If you have opted in to the Government Workplace Pension the minimum contributions (both employer and employee) increase from 6 April 2019. The employer contribution is increasing to 3% (previously 2%) and the employee contribution is increasing to 5% (previously 3%).

Pension contributions are generally linked to salary, although not necessarily your full pay, so should increase if you have an April pay increase.

Tax code

Your April pay slip 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 for NICs rises by £4 a week while the upper earnings limit (the top level of earnings on which you pay full 12% NICs) increases 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.

If your April pay slip brings you sadness and kickstarts your job search drop us a line on 0114 321 1873 or hello@www.glurecruit.co.uk.

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