Hello there
Just been informed we are getting a 10% GROSS pay cut. Trying to work out what the net loss would be. They have said it is about 6%, but would like a second opinion.
Thank you.
10% gross cut, what is that approx net?
Apr 23, 2009
5 Replies
It depends on what you earn, what deductions are made etc.
Probably 6.9% if you earn under about 44k, or 5.9% if you earn more than 44k.
But it'll be different if you're in a company pension scheme which takes a % of your income, or if it's contracted out.
I make it about 9.6% for a salary of £30K and considering only 20% tax on earnings over £5K.
What other things need to be factored in?
NI.
I answered the wrong question really, my answer gives what % of his gross the OP will lose. Eg if he's on 20k he'll probably lose 6.9% of 20k ie 1380. Could get more in tax credits, depending on income/circumstances.
As others have said, it depends.
It also depends on what you are calculating the % against.
But to a reasonable approximation, your NET salary will also go down by about 10%
I cannot remember exactly what the bands are but taking NI as 12.8% to
40k, 1% above. 0% tax to 5k, 20% to 40k I get a NET salary reduction of 8.6% for a salary of 45K. (Previously take home would be 30.8K, now it's 28.2K)If you're below 42K or above 66K then it's >9.0% reduction in take home pay.
Tim.
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