Personal **Income** is the name given to money being received by a person. Income can come from a variety of sources, depending on the individual circumstances for each person:

• salary, which is shown as the amount earned over a year, but paid monthly;

• wages, normally paid weekly but shown as a weekly, daily or hourly rate;

• as a self-employed person, when payment may be irregular;

• benefits, which may be to help with childcare, housing or being out of work, or for the disabled;

• pension, which is paid when your retirement age is reached.

People in work will receive a payslip. A payslip will show **gross income** for the period, which is the amount that it cots the company or organisation to pay the individual. The payslip will then show deductions, such as **income tax**, **national insurance** (a kind of income tax), **student loan** repayments, **pension** contributions and so on. Finally, the payslip will show the **net income**, which is the gross amount with all these **deductions** taken away. The net income is the amount that the individual will actually be paid.

Joe has received his payslip for the month of March. It shows gross pay of £1550, with income tax of £143, National Insurance of £84 and a pension contribution which is 4% of his gross amount. How much will Joe receive in March?

Pension contribution is 4% x £1550, which is `frac(4)(100)` x 1550 = £62.

Working out the deductions: 1550 - 143 - 84 - 62 = £1261

Answer: £1261

Emma is on a salary of £15,800 and works 38 hours each week, but is offered a new job paying £8.25 per hour and working 40 hours per week. She will no longer be paid for holidays, and plans to take 4 weeks holiday per year. Would she be better off taking the new job? Assume that there are 52 weeks in a year. Give a reason for your answer.

The new job is worth 8.25 x 40 = £330 per week.

Over the year that is 330 x (52-4) = £15840 per year (allowing for holidays).

She would earn an extra £40 a year, but would work an extra 96 hours for that £40.

Answer:

Either answer can be taken as correct providing that the reason was valid.

Yes: she would be £40 per year better off

No: she would be working an extra 96 hours for £40

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