Is working extra hours worth it?

jamesmorgan

FinanciallyUnsavvy wrote: »

I'm not sure about national insurance. I've heard conflicting things. If you are paying it from your main job you may not have to pay extra but I need confirmation of that myself.

This link explains how NI works for a mix of employed and self-employed income (http://www.hmrc.gov.uk/working/intro/employed-selfemployed.htm). If you earn more than £5725 from self-employed work by default you have to pay NI. There are, however, ways of reducing this such as setting yourself up as a limited company and paying yourself dividends rather than an income. Such schemes tend to only be worthwhile if you are receiving a lot of self-employed income. If you earn less than £5725 you can apply for a Certificate of Small Earnings Exception. With this you pay no additional NI.

Re student loans it is correct that this is only payable on a salary of £16365 (was £15000), however, it is actually worked out of a monthly basis (assuming monthly salary) of £1363. As an example, if the OP's normal salary is £1000 and they do one-off additional work of £600 in the month for the same employer, then a payment is made to the student loan company of ((1000+600)-1363)*9%. This payment is made even though the actual total annual income is £12600. In theory it is possible to claim back over-payments if the annual salary ends up lower than the threshold but I don't know in practice how easy it is to do this.