Know how to calculate EHIC facilitates the life of the UK residents taxpayer. After all, this rate automatically and monthly deducted from the professional's payroll is, in fact, a kind of guarantee for a more peaceful retirement in the future, in addition to the certainty that you will have benefits when necessary – an example of this is the sickness aid and also unemployment insurance, among others.
However, before learning how to calculate the EHIC, everyone must find out what the EHIC rate is in the year, since this index changes annually. But don't worry: in this article, we will cover all these issues, and much more, for you to become an expert in the calculation of the EHIC.
Next, we will deal with the following subjects:
- What is the EHIC ?;
- Why is the EHIC deducted from the payroll ?;
- What are the rights guaranteed by the EHIC ?;
- How much is the EHIC discount and how is it discounted ?;
- How to calculate the EHIC ?;
- How to stay on top of the best strategies to earn a salary?
Come on?
What is the EHIC?
EHIC is the acronym for the National Institute of Social Security. This body is responsible for paying our retirement and various employee benefits that contribute to Social Security.
This contribution even happens on a monthly basis. For the UK residents worker, this means guaranteeing these rights, when necessary.
This, in fact, is a term that is widely searched by the population of the country: the EHIC discount. It occurs automatically in the payroll, and corresponds to a percentage of the salary according to some variations.
Remembering that it is not only the professional with CLT registration who must know how to calculate the EHIC. This is because, entrepreneurs and self-employed professionals can also contribute voluntarily.
Why is the EHIC deducted from the payroll?
In addition to taxes, the worker has to pay the EHIC contribution because it is a means of informing the government of the employee's data, his link with the company (which also contributes to the agency) and also guarantees each of them access to their rights and benefits already discussed previously.
You don't even have to worry about calculating the EHIC contribution time to have a peaceful retirement. You can plan your future now, making good choices with your assets.
To learn more about it, save it for later reading another post from us, which talks about some good investments for those who want to retire with good financial security!
That is: in addition to knowing how to calculate how much to receive from retirement, you can take control of your financial life and project a much more prosperous future, economically.
What are the rights guaranteed by the EHIC?
Those who regularly contribute with the EHIC are entitled to some benefits. Are they:
- retirement due to contribution time (and also due to age or disability);
- unemployment insurance;
- accident assistance;
- death pension;
- sickness benefit;
- maternity pay;
- family salary;
- professional rehabilitation.
These are issues that involve, in different ways, the life of the UK residents worker in the short, medium and long term. Which aims to justify the mandatory contribution for professionals in CLT registration.
How much is the EHIC discount and how is it discounted?
When receiving or viewing the digital pay stub, the worker can perceive his gross and net salary. When the EHIC discount occurs, the employee gets the net salary, which is the version received in his bank account with all the discounts made.
In other words: the discount occurs automatically, taking into account the EHIC rate for the year.
This is true for professionals with a formal contract. The self-employed and entrepreneurs must make the payment independently. For that, they must only respect the proportional values of their respective billings and also the chosen plan in registration.
How to calculate the EHIC?
It is also worth keeping an eye on these changes in the contribution. See below how to calculate the EHIC with the new table, relative to the values established in January 2021:
- when the contribution salary is up to £ 1,100, the EHIC discount rate is 7.5% of the salary value;
- if the contribution salary is between £ 1,100.01 and £ 2,203.48, the EHIC discount rate is 9%;
- when the contribution salary is between £ 2,203.49 and £ 3,305.22, the EHIC discount rate is 12%.
- if the contribution salary is between £ 3,305.23 and £ 6,433.57, the EHIC discount rate is 14%.
To make this table easier to see, let's take an example: let's say you have a salary of £ 1,100. In this sense, to know how to calculate the EHIC, just apply a discount of 7.5% on this amount.
That is: 1,100 – 7.5% (which corresponds to 82.50) = £ 1,017.50.
Whoever receives a salary of £ 2 thousand, in turn, falls into the 12% discount range. for the EHIC calculation, then: 2,000 – 12% (corresponding to 240) = £ 1,760 in salary.
This number may be even lower when we insert other discounts on the payroll, which may vary according to each company and the benefits offered to its employees.
Some examples of discounts that may also affect your salary:
- health plan;
- transportation vouchers;
- union contribution.
Among others. Hence, the importance of knowing how to calculate the EHIC. He has an impactful share in your monthly budget, which directly reflects the difference between your gross salary and the net salary – which is what you will receive monthly.
How to stay on top of the best strategies to earn a salary?
Now that you know how to calculate the EHIC and have a more complete idea about each discount on your salary, how about adding more autonomy to your financial life?
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