Wage calculation

Newlywed_2

Hello just wondered if someone could help me with this calculation.

Current job 39k salary. Pension 400. Tax and national insurance 800.

New job.

Year 1 - 22k
Year 2 - 36k
Year 3 - 41k
Year 4 - 52k

Assuming I paid the same pension contribution (13.44%). How long would it take for me to be in profit in take home pay with new job.

I am losing 20k earnings in first two years.

Thanks in advance

YorkshireBoy

Google 'salary calculator' and plug your numbers in.

eskbanker

Newlywed wrote: »

I am losing 20k earnings in first two years.

....and at the same gross level you're only gaining £15K during years 3 and 4, so it'll be year 5 before you're all square again, although by then you'll probably be paying higher rate tax.

There are obviously any number of unknowns, such as what the pay in your current job would be in five years time, and tax thresholds and rates, and anything else imposed or changed by government over the next few budgets....

jonnygee2

How long would it take for me to be in profit in take home pay with new job.

Forever, because there's a good chance you'll be let go before year 3. Before two years service, you can essentially be dismissed for almost any reason. So I wouldn't count on earning the year 3 onwards numbers but just work on the assumption it's years one and two only.

Ben8282

Where do these figures come from? Do they depend on any promotions? It is a strange payscale that has such massive automatic pay increases every year.

Terry_Towelling

Absolutely impossible to say. As Eskbanker says, what might be your salary progression in your current job? Will paying HRT slow down your catch-up rate? How will tax rates/thresholds change? Might you lose your job along the way? Are you certain about the salary progression in the new job - is it dependent upon anything (e.g passing exams, getting favourable appraisals etc)?

You'd also need to factor in the 'opportunity cost' of the lost income in the early years and the reduced pension contributions. What about other costs such as travel to work - is it closer/further? Will you have to travel by train instead of car/bicycle?

On top of all that, can you actually afford to service all of your financial obligations in the early years with the salary reduction?

Newlywed_2

Thanks for all the replies. Was looking for an estimate rather than exact answer as it's impossible predict government.

Approx a 1 pcent increase on the 39k but probably the same increase in new job.

The new job figures are whilst in a training period so are guaranteed to go up.

I can afford the lower wage luckily but wanted to know how accurate my 5 years to catch up is?

colsten

Newlywed wrote: »

I am losing 20k earnings in first two years.

Apologies if that's a dim Q: how are you losing £20k earnings?

LobsterMemory

Because they're getting £58k in the new job but would have got £78k in the old one

Newlywed_2

year current new
1 26018.43 16200.4
2 26278.61 24215.12
3 26541.4 27077.52
4 26806.81 33574.8
5 27074.88 33910.55

132720.1 134978.4

Newlywed_2

Do these figures seem correct? The current job is disposal income with a 1 % pay rise.

New job is with 4 years automatic progression and in 5th year a 1% rise.

Both paying same pension contributions.

It shows 5 years break even. Then 7k extra each year?