What you need to know before you start working

What you need to know before you start working by Michael Cheary Ready to start earning? There’s something you should know…Entering the workforce can be an exciting time, but there are a few things you need to consider before you start your first job. Especially when it comes to your pay packet.To help ensure you’re not caught out in your new role, we asked Money Advice Service to cover some basics you should make sure you’re aware of:Tax and National Insurance deductionsAs an employee you pay Income Tax and National Insurance on your wages through the PAYE (Pay As You Earn) system.How much you pay is determined by your tax code, which is worked out by HM Revenue and Customs (HMRC) and sent to your employer. Your employer will deduct tax and National Insurance contributions before you get your pay.You can have a certain amount of income each year before you need to pay Income Tax. This is called your Personal Allowance. The standard Personal Allowance for tax year 2015-16 is £10,600.If you earn more than £155 a week you will have to pay National Insurance contributions. You pay 12 per cent of your weekly earnings between £155 and £815, and 2 per cent of your weekly earnings above £815.Tax and National Insurance deductionsStudent loan repaymentsOnce you graduate and start working and earning enough, student loan repayments also begin. Repayments will be taken out of your salary along with tax and National Insurance, and stop once you’ve paid them off.There are two repayments plans Plan 1 and Plan 2. Which one you’re on will determine when you start repaying your loan and how much you pay.Plan 1 is for students living in England and Wales who started studying before September 1, 2012, and all students living in Scotland and Northern Ireland. Repayments start when you earn over £17,335. This amount changes on April 6 every year.Plan 2 is for students living in England and Wales who started studying on or after September 1, 2012. Repayments start when you earn over £21,000.When youve paid back your loan, HMRC notifies your employer and the repayments stop. If any payments slip through before your employer takes action, you will be refunded.Student loan repayments Understanding your payslipAll employees are entitled to an individual, detailed written payslip.Your payslip shows you the income you earn and the deductions taken from it. It also gives you a running total of your earnings for the year as well as the total Income Tax and National Insurance you’ve paid.And it doesn’t have to be on paper. It can be sent to you by email, or accessed through a website. The right to a payslip applies to casual staff as well as employees, but not to independent contractors or freelancers.No matter what position you’re in, it’s important to keep your payslips in a safe place. They contain personal information about you and your earnings, including your National Insurance number. This will help prevent them being used for identity fraud. You may also need them to prov e your earnings if you apply for a loan.Understanding your payslipEmployment contractsAll employees have an employment contract with their employer. This sets out the rights, responsibilities and duties of both parties.Any rights you have under an employment contract are additional to your legal rights. Legal rights include the right to be paid the National Minimum Wage, the right to paid holidays and the right not to be discriminated against.Most employment contracts are in writing and are usually made up of a mix of ‘express terms’ and ‘implied terms’.Express terms are those that have been specifically mentioned by both you and your employer. These may include how much you’ll be paid, the hours you work and how much notice is needed to end the contract.Implied terms are automatically part of a contact even if they’re not written down. These might include employees not stealing from their employer, and the provision of a safe working environment by an employer.Checking your employment contractStill searching for your perfect position? View all available jobs nowFind a job What Where Search JobsSign up for more Career AdviceSign up for moreCareer Advice Please enter a valid email addressmessage hereBy clicking Submit you agree to the Salaries School leaver advice