Question on take home pay regarding back pay

[SusanSHelit]

I have a ques about back pay and tax, and after much googling thought you lovely lot might be able to enlighten me.

I work for the NHS as a hca, currently band 2 but working at band 3 level. Our union has voted to strike for rebanding to top band 3 and the trust has now agreed to this, and to back date pay to either 2018 or whenever we started with the trust.

I started in early 2022, so have worked out I would get very roughly 3900 in back pay before tax. However, I can't for the life of me work out how much will actually land in my bank account?

Anyone a good deal cleverer than me able to help?

Take off 40% to be safe. Covers tax, NI etc.

That seems like a lot, would it really be that much? 😔

It depends how they tax you, but worst case scenario is that they assume that your new salary is what you normally receive plus £3900 each month, so they tax you as if you'll be earning that every month. But then they compensate for that by undertaxing you a bit for the rest of the tax year so it balances out by the end.

So if you overpay £1000 this month, you'll then pay £100 pm less than what you should do on your new salary for the rest of the tax year to make up for it.

I don't know if there's any way around it being done like that, I can only suggest that you ask your payroll people.

More like 33%- 20% tax, 23% NI

So you'll get 67% of it.

So 67% of £3900 which is £2613

13%, sorry typo

Ok that seems a bit fairer. I think they are talking about being allowed to split it over a year also to avoid cocking up universal credit payments etc but I think I'd rather just have the lump sum. I might even be able to pay off my overdraft and go for a weekend away!

Employees NI is either 8% or 2% now…the lower rate has been cut several times recently. But, I think the OP should also check the pension situation, as I expect in any defined benefit type scheme it would automatically be pensionable earnings.

Do you also pay into the nhs pension? You will need to consider deductions for this if you do. Plus if you work shifts, consider whether the pay rise to top of band 3 will actually put you into the next bracket for nhs pension contributions. You may find they deduct an amount from your lump sum to account for that too.

I’d take the split if i were you depending on how much Uc you get it could wipe your Uc out for the next month.