To think there was no point in my getting this promotion? Tax related

[justfoundout2014]

I am no doubt being utterly ridiculous, and this is not entirely unexpected, but having just had my first payslip following a promotion, I am taken aback by how little difference it has made. The pay increase was between £5000-6000 and that translates to £100 per month. I have paid £40-£60 a month more NI, tax and pension.

AIBU to think it was hardly worth it? My new role has considerable more responsibility, meaning more work to be done at home and therefore less time leftover, and for very little increase. Of course the extra money is great, but is not really going to make a huge difference, especially when compared to the difference in workload.

What is really depressing is that this is as good as it gets - there will be no point in my going for any more promotions, or even the next level of the pay scale, as I would lose my CB, making me worse off . As a newly single parent, this seems grossly unfair and a little sickening.

I know I am vey lucky compared to some, but I do a professional job with a serious level of responsibility attached, and it is now clear that I am going to have to spend the rest of my life, well, not struggling, but 'watching the pennies', not going abroad, having to say 'no' a lot to the dc etc

Anyway, a very self-pitying post, but seeing it in black and white today has given me a jolt.

also, wondering if they have also bumped up any student loan repayments due to higher salary?

Tax is cumulative so there are occasionally things which throw it out and end up correcting by year end.

Again this is what your pay slip is for...

Justfoundout, this is exactly what I found and I was very resentful over it. I also had a promotion and a £5K rise. We started to pay more tax as a family, lost nearly all our TC, as we suddenly became very well off with just under £200 extra coming in every month. Not to mention it was shed loads of more stress for me in return for that "bigger" salary, longer hours and greater responsibility. It took we 2 months to reach the conclusion it was not worth it, but ,surprisingly, moving down to a lower job with part-time hours was so-so-so difficult. It took me best part of a year after I started actively looking. Until then, I just sucked it up and continued to carry the heavy load for frankly unfair remuneration. I have learnt my lesson.

according to the website 12.4% is the most any teacher pays into their pension. (And its tax deductable so it only actually costs you about 75% of that) and if its a defined benefit shceme you would need your head tested to opt out or freeze. Defined benefits schemes are like gold-dust and vanishingly rare these days.

What date was your promotion - are you sure it wasn;t part way through a month and it will go up next month. £100 a month increase gross = £1,200 a year not £5-6k

At 12.4 percent, I still make it 253 quid, give or take...

Student loan repayments?

It depends. Do you only work for money?

you would be an idiot to opt out of the teacher's pension scheme. it seems like a lot but if you compare it to what you'd have to pay to get similar returns on the open market, your eyes would water. and your private pension wouldn't be guaranteed, it would be defined contribution where you hoped to make the returns predicted. there are multiple threads on mumsnet alone which break down the figures and explain why it's such an amazing deal if you're part of the teacher's pension; pensions anywhere close are like hens teeth in the private sector. example thread (one of many): www.mumsnet.com/Talk/legal_money_matters/a1819080-Any-teachers-opted-out-of-the-pension-scheme

I am very, very fortunate in that I joined teaching at a time when there was a scheme running that paid off the student loans of teachers of shortage subjects as long as they remained in teaching for a certain time.

I have no intention of opting out of the pension - I am a bit sick about the changes, but have fuck all else in place for my future, so would be an idiot to leave it (though I do appreciate the suggestion). Mind you, I do sometimes wonder what the point is in paying into it when my retirement will probably last abut 10 minutes the way things are going.

mooth Yes and no. I love my job, but not to the extent that I want to have very limited time and energy left over for my children, and not even be able to say that they are benefitting much materially from the situation.

They might be benefitting from growing up with the knowledge that Mums go ouT to work, in a professional role, and contribute financially. That Their mother has a real job, a real career, and can talk about it with them.

Having had many 'big' positions in the past and nearly gone mad with the stress and workloads...now working in a less stressful and rewarding job... I have learned to work out my true hourly rate.... makes you think.. ;-)

Ooof mooth, be careful saying things like that! I'm sure it wasn't your intention but sounded very anti-SAHM.

You're right of course about the pension. I guess it has to be a personal decision on a case by case basis.

Hmm, I really do need to contact the TP and find out what will happen to mine.

Hahaha Petra I did that on my GTP year. Less than minimum wage! (By a long way.)

If you are up to the upper 40% rate than the extra pay is taxed at 42% so a little under half goes in tax particularly once whatever you pay into the pension is taken off. I would still check it. It is not too hard to check a tax deduction, particularly on the P60 at end of the year or give the figures on here and we can check.

I do think tax is far far too high in the UK and getting higher and higher. The 40% rate used to be paid by very very few people and now it is catching more and more people. NI used to stop but now it's 2% rather than zero on upper earnings (thank you Gordon Brown who said that little increase would pay for the NHS for a generation - lying through his teeth no doubt).....

What we need is much lower taxes say a flat 33% (the current standard basic rate of 20% plus 12% NI+ a bit to make it a straight third) for all whatever you earn and the same rate for capital gains and none of the complex reliefs people exploit so much.

Yeah, the numbers aren't adding up. Your money is disappearing else where if you only have and extra 100 a month. Are you paying extra into your pension because of this raise? That might make it worth it.

Ignoring numbers and to your point, does this new position open up an opportunity for higher ranks or since it's a teaching job, you can't get much higher without become HT or something? If it doesn't offer much room for career growth and you're not seeing many benefits from it, I'd consider asking for your original position back.

You are a teacher, and you have had a promotion, but you couldn't see what we all saw, at once, on reading your post, that your figures didn't make sense?? That's a big worry!!!, Hope maths is not your subject.

There are websites where you can add your salary and it works out what your monthly income would be. www.thesalarycalculator.co.uk

Grannymcphee - how rude. Perhaps the phrase 'cant see the wood, for the trees' applies here. Or the OP was in a panic?

No, I don't teach maths - stop the panic! I teach English and, as an aside, attended a school with a ridiculous setting system which meant that, following a high rate of illness-related absence in Yr9, I was placed in a bottom set for GCSE maths, meaning I was also in bottom set for English . I pretty much 'checked out' of maths after that and had to do an equivalence test to become a teacher.

My current post would make it easier to become a HoD and I have no desire to go any higher than that. Becoming a HoD would probably mean a pay increase of around another £5000, so no more CB and an absolutely ridiculous amount of pressure. Not at all sure now that it would be worth it, which kind of puts my whole career path in question .

I always find that my pay rises never make much difference (also a teacher). I recently swapped schools and had a massive pay rise, it has made a difference but nowhere near what you would expect. The pension has gone ridiculous although I believe it to be essential, and I still have my student loan.

Do you have the pay calculator that you can download from TES - I'm not sure if it has been updated with the 1% increase but it may give you an idea whether things are right.

Hi im not a teacher and have been promoted a few weeks ago, promised a substantial payrise but not had it yet...more work, more stresss but no more pay yet. Have been told its coming but worried about the amount and impact om my tax credits. On 20k and get ctc for childcare and really dont want to lose that- will wipe out salary increase.
Can see why some peeps dont go for promotions esp parents!

This website is brilliant for tax calculations
www.listentotaxman.com/

Those of us who know tax are saying it is wrong.

"The pay increase was between £5000-6000 and that translates to £100 per month. I have paid £40-£60 a month more NI, tax and pension."
If the pay rise was £5000 then it will be taxed at the most 42% tax and NI or 20% tax and 12% NI if you are not up to the 40% tax rate.

£5000 x 42% is £2100 a year extra tax. which is £212 a month not £100 a month as stated. If you pay say 12% of what extra you earn in tax that will means the sums seem wrong so do go and look into it further.

Basically the state in the UK for many of us confiscates almost half of what we earn and when we die 40%. These are huge disincentives for getting out of bed and actually working so you can see why the country is in such a mess. We have gone from one of the lowest taxed in Europe to one of the higher ones. It has got to stop or people are just not going to bother getting promotions and doing extra work. My brother stopped working at weekends (he is a doctor) when half of what he earned started to go in tax because that was tipping point - would rather spend money with his children (until he set up his own limited company). If tax and NI and CGT were say 33.3% for all people might be happier to put in that effort, work weekends, make the nation be more in a position to pay back national debt. As it stands the incentives are not there.

Op, you know that losing CB is tapered between 50k and 60k, right?