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What Happens to Your First Salary · Lesson 2 of 4

Where the difference actually goes

Four things usually account for it. Income tax, which is normally banded, so only the slice above each threshold is taxed at the higher rate — a raise never leaves you worse off. A social security or national insurance contribution. A retirement or provident fund contribution, which is often matched by the employer and is therefore the one deduction that is straightforwardly yours. And health cover, where that is payroll-deducted rather than public.

The names, rates and thresholds differ in every country, so treat this as the shape rather than the arithmetic. What travels is the habit: read the payslip line by line in month one and make someone explain anything you cannot identify.

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