Updated: May 28, 2020
It's pay day! You see your net salary at the end of the month reflecting on your hard earned money with overtimes, bank shifts and those weekend night outs and getaways you've missed because you're at work. But have you ever really taken a closer look on your payslip or do you just look on the bottom right hand corner of it to see how much you've been paid? Well, understanding how you are getting paid can guide you about when are the best days to book shifts, how taxes impact your earnings which may help with planning your finances accordingly.
NHS salary follows Agenda for Change which is the main pay system for NHS staff excluding doctors, senior managers and dentists. As an overseas nurse, you will start as a Pre-registered nurse on a Band 4 pay scale. Once you've passed the OSCE and NMC has granted your PIN, you can start to work and be paid as a Band 5. Being a newly qualified nurse, you will start on the lowest point of Band 5 pay scale. Salary for a point 1 Band 5 normally starts at £24,907 per year and will increase annually provided you have completed your annual appraisal. To know more details about the updated NHS Salary, please click video.
Looking at all the numbers in your payslip might be intimidating. But by deeply understanding what those numbers mean, you can spot if there are errors, if you’ve been paid correctly and make better decisions about when to do extra work.
For easy viewing, we have broken down the payslip into 4 parts.
Assignment Number - First eight digits of your employee number; If you have more than one post, it will be indicated with -2 -3 and so on.
Salary/Wage - this indicates your full salary according to which point you are in the pay scale
Incremental date - shows the date that you will get your annual salary increase until you reached the maximum point
Standard Hrs. - the number of hours you’re contracted to work (37.5 for full time)
PT Salary/Wage - this is the actual salary you get per year according to your contracted hours; pro-rata for part time.
Tax and NI Information - take note of these figures as you need these if you need to contact HMRC or tax office for any reason.
Enough of the boring bits. Let’s dive in with the salary dissection. Shall we examine closely how NHS Nurse was paid in March 2020 apart from her basic pay? She is already on top tier Band 5 pay scale and working 31 hours a week. This means she will be paid pro rata according to her contracted hours.
This is your contracted hours per month x hourly rate (depending on your pay scale rate). Full time hours equates to 37.5 hours per week or 150 hours per month. In the UK, employees are paid per hour for the hours that they have worked in a month. So if you work part time at 31 hours, you will be paid pro rata, which means your salary will be in proportion to a full time pay. It just means your hourly rate will still be the same but your salary will be less than a full time staff because you have worked less hours.
134.70 (contracted hours per month) x £15.39 (hourly rate) = £ 2074.38
Since nurses work on shifts to care for patients 24/7, unsocial hours such as night shifts, weekends and bank holidays have enhanced payments. This sort of reward for working out of hours can make you earn extra money apart from overtime and bank shifts which we will be tackling shortly. Now, different categories of unsocial hours are paid differently. The pay enhancement is the fixed percentage of the number of hours worked outside the standard working times. Take a look below to see how much enhancement you will get for each shift.
Night shift (any weekday from 8pm to 6am) - 30% of the hours you’ve worked within these hours of the night
Saturdays (midnight to midnight) - 30% of the hours you’ve worked Saturday
Bank Holiday and Sundays (midnight to midnight) - 60% of the hours you’ve worked on Bank Holiday or Sunday
NHS Nurse worked 23 hours night duty and 39 hours Saturday. First you need to work out the 30% of the number of hours she worked on nights or Saturdays. The products are then multiplied to her hourly rate which will be the enhancement amount.
- 23 hrs x 0.30 = 6.90 (unsocial hrs to be paid) --- 6.90hrs x £15.39 (hourly rate) = £106.26
- 32 hrs x 0.30 = 9.60 (unsocial hrs to be paid) --- 9.60 hrs x £15.39 (hourly rate) = £147.84
Let’s take a look for Sunday shifts which have 60% enhancement. It will be the same computation for Bank Holidays as well.
- 11 hrs x 0.60 = 6.60 (unsocial hrs to be paid) --- 6.60 hrs x£15.39 (hourly rate) = 101.64
This stands for the Working Time Directive in line with European Union legislation which sets minimum requirements for working hours, rest and annual leave for employees to maintain their health and well-being. The computation can be complicated but there are WTD pay calculators online if you are still curious to know about it.
Overtime hourly rates usually depend on each Trust or department within it. Some Trust overtime rate is time and a half of the hourly rate. For instance, if she worked 10 hours overtime the computation will be like this and will be then added to her gross pay.
10 hours x 1.5 = 15 hours ----------15 hours x 15.39 = £230.85
You need to join the NHS staff bank in order to work Bank shifts. Again, the hourly rate depends on the budget of the NHS Trust. In some Trusts, bank shift is paid flat rate which means she will get whatever her normal hourly rate is and enhancements depending on the shifts she’s done. Some NHS Trusts especially in London give better rates for bank shifts but will still be Trust dependent. Bank shifts are normally received on a separate payslip hence you will have a second assignment/ employee number.
Now that you have a better understanding of your salary, let’s get into the deductions! Taxes, taxes, taxes. The UK is well known for collecting high tax rates and high cost of living. But these taxes are also the main reason why the NHS survives and other state benefits are in place.
To simplify computation for basic rate tax deduction is usually 20% of your gross salary for basic rate taxpayers. If your salary exceeds £40,000, that will have different number crunching process. For now, let’s focus on the 20% tax since starting Band 5s will fall in this bracket. Bear in mind that this is just a rough guide as tax calculation is complex if you consider other factors such as taxable pay, tax free allowance etc.
PAYE (Pay as You Earn)
This means Pay As You Earn. This is the Income Tax deducted by your employer before you can even get a sniff of your salary. Employers are responsible for calculating this following the guidelines from HM Revenue and Customs (HMRC). The amount that will be deducted is based on your tax code.
In this payslip, NHS nurse's tax code is 1283L which means £12,830 of her salary will not be taxed. This is her personal tax allowance. Since she earns £30,112 in a year, the remaining amount after deducting the £12,830 will be taxed.
NI (National Insurance)
This is the National Insurance. National Insurance is the UK’s tax system that requires all the workers and employers to make regular monthly payments to gain access to state benefits.
Your NI contributions will depend on how much you earn. These contributions allow you to use certain state benefits (might differ if you are on Tier 2 Visa) such as state pension.
NHS is well-known for having a comprehensive and generous pension scheme as part of its recruitment and retention strategy. You will be automatically enrolled in the NHS pension scheme as you start your employment to the Trust. Your contribution will be based on your annual salary whichever falls on the Tier bracket set for employers to follow. For new starters with £24,907 income, 7.1% of your salary will be deducted.
In the sample payslip, she falls in Tier 4 because she earns £30,112. Hence, she contributes 9.3% of her salary.
Pensionable Pay (£2474.77) x .093 = £230.15
Pension Employee Contribution Table
You can have other expenses taken out from your salary such as hospital accommodation payments, Union subscriptions (RCN or Unison), car park payments, childcare vouchers or other salary sacrifice schemes provided by your Trust.
Finally, the period summary gives you an overview of your gross pay and all the deductions that have been made. I probably don’t need to discuss any further your Net Pay because this is the only section in the payslip that we gaze our eyes into every pay day.
As we scrutinise how we are being paid in the NHS, working Sundays and bank holidays provide twice as much enhancement than nights and Saturdays. But still consider the fact that you will still get decent enhancement for night shifts and Saturday shifts. Overtime and Bank shifts are helpful to gain extra income but just be mindful that doing so many hours extra may cost you more tax. I hope this article provided a deeper insight on how you view your payslip and better understanding on how you should be paid. After all, those hours worked are hard earned and you deserve to be rewarded with the right compensation. Happy Pay Day!