Help me navigate new nmw pay rise and new ni threshold please thought I was

[PaperTyger]

Thought I was going to be 60 better off and obviously with all the new price rises I needed it.
I earn nmw under 12500 so was hoping to get the ni threshold benefit.

Then the nmw is going up but that then pushes me over the threshold to 12 800.

What's the best option for me as I could drop a week or two on my contract?

If your wage is going up because of an increase to the NMW but it will push you into the point where you pay tax and NI will you not still be better off overall as you will lose the tax (20%) and NI (13.25% or whatever it will be) leaving you with the remainder after that.

Yes that's what I am thinking.
Would I actually be better off by dropping my week's a little.

Sometimes there are amazing number crunching people on here who maybe able to work it out for me

You only pay NI and tax on the bit above the thresholds, so you still get more money by earning more.

Not paying ni would be about 320 a year,the tax increase is about 330 and I don't pay tax at the moment.

Put your details into
www.listentotaxman.com

Make sure you select the correct tax year. It’ll give you a breakdown and tell you how much more (or less!) you’ll earn compared to last tax year.

£12,800 per year?

The NI threshold is actually changing in July, it’s £823 a month initially, then £1048 per month after that - earnings above that will see NIC of 13.25% deducted

If you’re on 1257L tax code, then tax would be approx £3.80 a month

So I put my current wage and pension contributions into the above website.
Then it looks like I'm going to be 7 £ a month worse off with the nmw increase??

You don't pay tax or national insurance on all your money when you go

So if you earn £1 above the threshold you will only pay NI on that £1 not all your earning.

The same applies to tax

But you'll definitely be worse off dropping hours. You can't take home less if you earn more gross.

I put my current wages into the calculation above and that's what's it says... I'm on the cusp so staying as I am with no mnw but ni drop I will gain about 27 a month.

However the nmw will push me above Just above 12500 so that will trigger tax and ni increase.

However I worked out if I drop two Weeks as I am I will be 40 pm worse off.
What I'd like to know is if I drop two weeks, keeping me just below 12500 I may be better off?

No you won't be better off dropping hours. You will only be taxed about 33p for every pound above the threshold that you earn.

Have you put a figure of £12490 in to the calculator for 2022/23?

Or how about you just suck it up and actually pay INTO the system for a bit instead of taking out all the time

It won't let me not pay ni strangely

Last bump incase pay roll person can help.

Go to www.thesalarycalculator.co.uk/salary - it says if you earn 12800 you will take home 12367.10; If you earn 12300 you’ll take home 11979.35. So a salary drop of £500 will mean a take home pay drop of £350. As above, earning less is not going to make you better off - you might pay some NI/tax on the extra but you’ll still take most of it home.

Put your old wage and new wage into thesalarycalculator.com as it allows you to compare two different figures. It will give you the amount you get broken down into weeks, months, 4 weekly etc (whatever period you need). It also gives you the figure you’ll get from July onwards.

@PaperTyger

Last bump incase pay roll person can help.

You have already had the correct advice - when you look at the thesholds, even if you do go over you only pay tax on 33% on anything over the threshold leaving you with the rest of the money.

So even if you were to lose 33p in every pound you went over, you would still get 66p take home. You wouldnt be better off by earning less and why wouldnt you want to pay more NI to pay more into your state pension?