Hi, I am Siri, an NHS doctor from India working as an SHO in General Medicine. It is important to have an idea about your payslip when you start working in the NHS. This article is about the basic structure of payslips and tax codes.
NHS doctor's salary structure
Firstly, you have to make sure you are paid correctly according to your contract. You will get ESR (Electronic staff record) login details from your HR department. You will get a payslip from ESR or a paper payslip from the trust. Payslips are hard to understand, so here’s a summary of the main things to look out for.
The first part includes basic details of your job title, employment number (assignment number or payroll number), location, department, pay band and work hours according to your job contract. I would recommend you to check your rota schedule for every rotation, particularly when you are doing on-calls and locum shifts. Most importantly, check it when you are moving to a new job.
The second part is your tax details, including tax code, reference and National insurance (NI) number (which will be on your BRP). Your tax code is determined by Her Majesty's Revenue and Customs (HMRC), and you need to check your tax code when you check your payslip.
Standard hours are the number of hours according to your contract.
Salary/wage is your full salary per year according to your grade, e.g. SHO/CT1/ST1 etc.
Tax office ref. is your trust's PAYE reference with HMRC. This number is important as it will be required if you decide to claim expenses using a Personal Tax Account. Iy will also be needed if you fill out a Self Assessment Tax return.
Another important thing to know about the payslip is the correct tax code, which is 1257L. When you start your first job, or when you are shifting to a new job HMRC might not know how much to tax you, and in that case, you will have an emergency tax code, which is temporary. Simply, it means you are paying more tax. You have to make sure you have the right tax code on the payslip. If you have an emergency tax code (0T NONCUM), you need to call HMRC and tell them about the wrong tax code or you can fill it in online. You will then receive your refund in the next month's salary. A P60 form is a statement or certificate showing how much you have earned, and the amount of tax you have paid in the last tax year. HMRC generates the information on P60 forms, but your employer or pension provider issues it to you.
What does the tax code mean? 'An employee’s tax code shows how much tax-free income they get in that tax year. You usually multiply the number in the tax code by 10 to get the total amount of income they can earn before being taxed. For example, an employee with the tax code 1257L can earn £12,570 before being taxed. If they earn £27,000 per year, their taxable income is £14,430.' - www.gov.uk
The third part includes Pay & Allowances, and Deductions.
Pay & Allowances:
Basic pay includes the pay for your normal shifts (9:00 to 17:00 without on-calls). It calculates as 1/12 of your annual salary.
Addition roster hours NP is the pay if you are doing on-calls (9:00 to 21:00). It includes any additional hours in a month above the 40 standard hours.
If you are doing night shifts, you will be getting 37% enhanced pay.
The weekend allowance depends on the number of weekends you worked, it varies accordingly. According to the Working Time Directive, doctors are allowed to work a maximum of 48 hours per week on average over a six month period.
Depending on your pay scale, the number of hours you work into the hourly rate will give you total pay. For example, contracted hours per month (173.81) x hourly rate (15.9) = 2778.75
PAYE - Pay As You Earn. This is the amount that will be deducted based on your tax code. HMRC deduct according to your tax code (1257L), which means the first £12,570 of your income in the tax year is tax-free. Your total earnings will be assessed each period and any resulting statutory and/or voluntary recoveries will be shown here. You can claim tax relief on GMC fees, indemnity insurance and BMA membership fees etc. The table below is from HMRC, about the tax rates and taxable income. Please always check the most up-to-date information on the official website about Income Tax rates and Personal Allowances
NI – This amount depends on how much you earn and your employment status. It is divided into Classes 1, 2 and 4, and will vary accordingly. You will pay along with your tax and it will be shown on your payslip. Read more about National Insurance rates and categories
Pension – According to the 2015 Pension scheme, you will be paying 9.3% of your total basic pay. It depends on the grade you are working at. Check NHS Business service authority for more details. You can opt out of the pension, by doing an application to leave the NHS pension scheme (SD502). It is also worth reading more about NHS pensions on the BMA website.
So, net pay will be gross pay after all deductions, which include income tax, national insurance and pension. Your salary will vary with and without on-calls, and you will be paid more if you are doing night shifts. The most common problem doctors have is receiving the wrong tax code. All you need to do is to update HMRC about your tax code.
TrewLink, in collaboration with the BMA and Chase de Vere Medical, hosted a FREE webinar on the essential financial planning tips and advice you need to know to reduce your tax exposure and build your wealth in the UK. The webinar covers topics such as NHS Pensions, tax considerations as an IMG in the UK, employee benefits and more.
Information on NHS doctor's contracts and payslip:
Pay: know what you're entitled to - a great guide from the BMA to familiarise yourself with a payslip.
Pay scales for junior doctors in England - the basic pay scales for junior doctors in training in England.
Example Payslip – England and Wales - an example from the BMA with a comprehensive explanation of what each payroll section means.
Example Payslip of a Specialty Registrar - another example of what a payroll would look like if you were a Specialty Registrar,
BMA guidance for doctors in the UK on issues that may impact their pay including rises, information on their payslip and claiming expenses.
Understanding your payslip - junior doctors on the 2016 contract - a guide from the BMA with a sample junior doctor payslip that explains different elements of pay that you might get.
Governmental websites with the information on taxes and allowances:
If you have any questions feel free to ask on the TrewLink website, we are happy to help.
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Written by Siri
Edited by Julia