Working out tax on second job - please help!

Jess158

Hi all,

I am a nanny and currently work 24 hours per week at £11ph net. My employer sorts out all tax/ni/pension contributions so that it all comes out, and I take home £11per hour.

I will be going down to 20 hours per week and I am looking for another job of 20 hours per week.

My confusion comes in when I am asked what my rate is and whether that’s net or gross.

I want to basically keep the same hourly wage if I can, so £11 per hour net. However I may not be employed by new family, but rather have to go self employed so I will have to tell them how much I require gross, and my head is spinning trying to figure out how much tax/ni/pension I will pay on job 1, and how to figure out what to tell them for job 2, and to come up with a gross sum!

If anyone could help me with this I would really appreciate it.

Thank you.

SuperHan

A (very) rough calculation says that you should ask for about £17 an hour to come out with a net £11 an hour. This allows for a pension contribution of up to 3%, tax at 20% and national insurance at 12% (so a total 35% deduction).

00ec25

your first job uses up all of your personal tax free allowance of £11,500 so anything you earn in the second job gets taxed at 20%. However NI works differently and you still get the first £157 per week without any NI deduction

No idea what is a realistic pension contribution, but sticking with the 3% mentioned above

if gross pay is £15.25 per hour for 20 hours = £305.00 per week
3% pension on that = £9.15
taxable pay therefore 305 - 9.15 = 295.85
income tax on 295.85 @ 20% = 59.17
NI on 295.85 - 157 = 138.85 @ 12% = 16.66

take home pay per week 305 - 9.15 - 59.17 - 16.66 = 220.02

220.02/20 hours = £11.00 per hour net pay post tax

I appreciate you may not think in terms of annual salary but for a 40 hour week £15.25 gross per hour is equivalent to an annual salary of £31,720

obviously if the pension % is different (it can't be less than 1%) the above will change, but it may be easier to tell prospective employers you want at least £300 per week before tax

so you understand fully, note that in your current (first) job the fact your income tax personal allowance is available to that means the first £221.15 (11,500/52) is free of income tax. So, depending on how much the pension % is, your current employers are paying you very little more than £11 per hour. For example if the pension is 1% then the gross cost to them would be £11.11 per hr (£222 per week) not £15.25!!! So think carefully about whether you can sell yourself to the same sort of potential employers given you need £300+ per week rather than £222 per week.

anselld

You should also be aware that the employment status of your second job is not a matter of choice, neither your choice nor the employers’. It is determined by the contractual arrangements in place...
https://www.gov.uk/guidance/check-employment-status-for-tax

Jess158

Thank you so much everyone for your help! I understand it a little better now.

Have also since figured out it is not legal for a nanny to be self employed if they have set hours! I was told in one interview they would not employ me as it works out to expensive (that was with them Offering £8.50gross per hour) and I would have to be self employed as their previous nannies have been, so that was why I thought I may have to go SE but have since found out that!!!8217;s not the case!

Think I will not be able to find a second
Job and still take home 11/ph so I will have to take a pay decrease for the second job, but I will make it work.

Again, thank you so much for your help, I just couldn!!!8217;t get my head around the numbers and equations!