Previous Earnings - As confusing as it gets.....!

[headstrong]

Hello folks,

Let me put my situation briefly:
1. Period to Claim for: Nov-2006 to Oct-2007
2. Nov-2006 to Mar-2007 (5 months) in India earning Rs. X per/month
3. Apr-2007 to Oct-2007 (7 months) in UK earning GBP Y per month

Questions:
Q28 Relevant country code?
A28 I believe it should be "Band A" (for UK) --- please suggest

Q29 Country where income was earned?
A29 United Kingdom? --- pls suggest

Q30 Amount you earned?
A30 Option 1: Total of Indian & UK earnings in GBP
Option 2: GBP (Y/7)x12 that is, UK earning prorated to 12 months
Option 3: Only total of 7 months of UK earnings

pls suggest which option?

Q31 Relevant income band?
A31 will this be A/B/C/D/E or something like 29,000 +

Another question...
Which component of salary is prorated?
- Is it the figure before tax & other deductions?
- or is it the figure after subtracting tax and other deductions?

I'll highly appreciate quick and concise answers to these question?

Regards,
-Ashish

[gorajim]

Hiya,

A28: Band A (UK - since the majority of the stay for the period of claim has been in the UK).

A29: United Kingdom.

A30: Option 2: Pro Rate 7 months UK income to 12 months.

A31: 29,000+ etc.


The Gross Income is prorated as per caseworker guidelines.

[headstrong]

Hi gorajim,

Thanks a lot for your valued reply.

By Gross Salary you mean the figure that reflects in our bank account or the one before tax (mentioned on payslip).

My Payslip has 2 components:
1. Period Gross Pay (Tax free allowance + maintenance allowance etc)
2. Period taxable Pay (Period Gross - Tax free allowance)
3. Net Pay

Which one of above will be prorated?

I hope you knw the answer!

Regards,
-Ashish

[gorajim]

Hiya,

By Gross Income, I mean the sum of all the INCOME heads in your salary slip. I believe this is the amount that the caseworker considers.

In your case, this should be the Period Gross Pay. In my case, this was the Gross Pay, the description of which closely matches what you provided in your post.

Please note that my statement is circumstantial, and based on experience, rather than on physical analysis of your payslip.

[richie_rohan]

Hi,
As per you query, I am also facing the same concern as you were can you please let me know what is the salary slip amound claimed.

1. Period Gross Pay (Tax free allowance + maintenance allowance etc)
2. Period taxable Pay (Period Gross - Tax free allowance)
3. Net Pay

Please reply.

[gorajim]

Hi,

Most plain vanilla salary slips have two major components - Income and Deductions.

Gross Pay: Sum of all your income heads.
Total deductions: Sum of all your deductions, including taxes, etc.
Net Pay is the Gross Pay less Total Deductions. This net pay is credited to your Bank.

For the sake of Previous Income claim, the Gross Pay is used to determine the points you are eligible (based on the matrix used by the HO).

However, the Net Pay is what should be reflected in your Bank statements and this is used for verification by the HO. A serious explanation is due when the Net Pay as per the payslips does not match that credited to the bank.

Both Gross Pay as well as Net Pay are therefore important. In your case, the "Period Gross Pay" will be used to determine the points and the "Net Pay" should be the amount reflected in the Bank statements.

[richie_rohan]

Hi Thanks for your reply.

I have one more component which is as following:
1) Period taxable Pay (Period Gross - Tax free allowance)

"The Tax free allowance reduces the tax liability/taxable income and to avail this allowance I need to submit rent, travel, food etc bills to get total Tax free allowance"

This allowance comes on P-60. Should this pay be considered or explained?
As on the salary slip it is clearly mentioned as Period taxable Pay
and Tax free allowance.

Regards,
Richie

[gorajim]

Hiya,

As I understand it, your Period Gross Pay is the sum of components:

Taxable Allowance + Tax Free Allowance

Taxfree allowance is determined by the quantum of bills produced during the period. Taxable allowance is (relatively) constant.

The Net Pay is the thus the sum of the post-tax Taxable Income + the Taxfree allowance to the extent claimed using bills.

IMHO, you can include the taxfree allowance to the extent claimed each month (and thus reflected in your salary slip). This will form part of the income used to determine the points.

[prem12]

Look at the Taxable allowance. Of course you get exemption on the expenses incurred under head rent, food, travel, etc which will appear as Tax free allowance. But that does not matter.

"Taxable Allowance" and that is all and only.
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[richie_rohan]

Just to echo ur words, so I can add my taxable allowance + tax free allowance to claim the points.

Regards,
Richie

[hsmphunter]

I got to see tghis site which explains everything about the HSMP. go to the previous earnings section of http://ec-hsmp.blogspot.com and see the details.

[prem12]

Just to echo ur words, so I can add my taxable allowance + tax free allowance to claim the points.

Regards,
Richie

take Period taxable Pay in your case
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