Finance WeekFinance Week

Finance WeekFinance Week

This week you will This week you will be…..be…..

Lesson 1 “What Job?”

• Choosing a job

• Calculating your “take home” salary

Lesson 2 “Where to live”

• Rent of buy?

• Choosing a property

Lesson 3 “What's the cost?”

• Running a property

Lesson 4 “Getting around” Buying a car Getting a life

What Job?What Job?

What is your ideal What is your ideal job?job?

DiscussDiscuss

Out of these find the closest match.Out of these find the closest match.Career Salary Location

Website Developer £15,000 (up to £18,000)

London/ Norwich

Plasterer/Plumber £15,000 (up to £30,000)

Anywhere

Shop Assistant £7,500 (up to £13,000)

Anywhere

Actuary £32,000 (up to £100,000)

London/Norwich

Display Designer/Window

Dresser

£9,000 (up to £18,000)

Anywhere

Computer Hardware Technician

£12,000 (up to £25,000)

London/Norwich

Groundsman/ Greenkeeper

£8,000 (up to £15,000)

Bungay

Solicitor £24,000 (up to £100,000)

Anywhere

Meter Reader £11,000 (up to £13,500)

Anywhere

Teacher £19,000 (up to £34,000)

Anywhere

Pilot £30,000 (up to 100,000)

London

A Pay SlipA Pay Slip

What is tax?What is tax?

In this country, if you are an employee (i.e. In this country, if you are an employee (i.e. you work for someone else), tax is deducted you work for someone else), tax is deducted from your earnings before you receive them. from your earnings before you receive them.

On your pay slip this is called 'On your pay slip this is called 'PAYEPAYE', or pay ', or pay as you earn; otherwise known as as you earn; otherwise known as income taxincome tax. .

It is collected by the Inland Revenue on behalf It is collected by the Inland Revenue on behalf of the Government, and is used to pay for of the Government, and is used to pay for things like healthcare, social security and things like healthcare, social security and welfare services, defence, roads and welfare services, defence, roads and education. education.

The amount of tax you pay depends on how The amount of tax you pay depends on how much you earn. much you earn.

What is National Insurance?What is National Insurance?

the National Insurance fund was used by the National Insurance fund was used by the Government to pay for a range of the Government to pay for a range of welfare benefits such as welfare benefits such as

1.1. unemployment benefit, unemployment benefit,

2.2. sickness and invalidity benefit, sickness and invalidity benefit,

3.3. maternity allowance, maternity allowance,

4.4. basic retirement pension.basic retirement pension.

You still need to maintain your National You still need to maintain your National Insurance contributions since they entitle Insurance contributions since they entitle you to these benefits should you wish to you to these benefits should you wish to claim them. claim them.

How is tax paid?How is tax paid?

PAYE is the system used by employers to take PAYE is the system used by employers to take tax and National Insurance contributions off tax and National Insurance contributions off your pay. They then pay over that money your pay. They then pay over that money directly to us, the Inland Revenue.directly to us, the Inland Revenue.

Tax RatesTax Rates Your tax code is made up of tax allowances. You Your tax code is made up of tax allowances. You

will pay tax at the following rates on your will pay tax at the following rates on your earningsearnings

You get charged no tax on the first £5,225 this You get charged no tax on the first £5,225 this is called your tax allowanceis called your tax allowance

on the next £2,230 you pay 10% (the starting on the next £2,230 you pay 10% (the starting rate)rate)

on the next £32,600 you pay 22% (the basic on the next £32,600 you pay 22% (the basic rate)rate)

on any income over £34,600 you pay 40% (the on any income over £34,600 you pay 40% (the higher rate)higher rate)

What is my NIC?What is my NIC?

As well as tax, your employer will usually As well as tax, your employer will usually take off National Insurance contributions take off National Insurance contributions (NICs) from your pay. Most employees pay (NICs) from your pay. Most employees pay the standard rate of NICs.the standard rate of NICs.

Up to £87 a week (£377 a month) you pay NilUp to £87 a week (£377 a month) you pay Nil Over £87 and up to £670 a week (over £433 Over £87 and up to £670 a week (over £433

and up to £2,903 a month) you pay 9.4%and up to £2,903 a month) you pay 9.4% Over £670 a week (£2,903 a month) you pay Over £670 a week (£2,903 a month) you pay

1%1% Above £34,840 a year the rate changesAbove £34,840 a year the rate changes

Calculations!Calculations!

Use your booklet to calculate your tax Use your booklet to calculate your tax and national insurance.and national insurance.

Complete the salary summary in Complete the salary summary in your Personal budgetyour Personal budget

Personal Budget

Name: Occupation: Location: Gross Salary:

Payslips, Tax and National Insurance

Property

Transport

Spending the Rest Calculate your remaining funds for a month = [Monthly Salary (net)] – [Total Property Cost + Total Cost of Transport] = This is your budget for food, clothes and having fun ect. Fill in this table, deciding how much you are going to spend in each category For food you will need a budget of at least £15 per week Food Clothes Sports Clubs Going out with friends Cinema Savings (for holidays ect.)

Monthly Salary (gross)

Monthly National Insurance

Monthly Tax Monthly Salary (net)

Mortgage Potential

Rent or Buy Monthly Cost of Mortgage or Rent

Household Bills

Total Monthly Property Cost

Money Left

Mode of Transport

Cost of Ticket (Monthly)

Cost of Loan (Monthly)

Additional Costs; Fuel, Car-Tax etc…

Total Monthly Cost of Transport

How do you feel about that?How do you feel about that?

HomeworkHomework

Use the housing boards in the Use the housing boards in the mathematics department and the mathematics department and the library to research the details of library to research the details of properties available in the area you properties available in the area you work in.work in.

You must:You must:Record all the details of any properties Record all the details of any properties within the correct area (price, rent, within the correct area (price, rent, location, etc)location, etc)