Post-tax Reserve Pay takeaway

[Rich - 7]

Hello all,

Probably not the greatest first post but a financial and honest query.

I have debated joining the reserves for a while but simply put it off, to be honest. With energy spikes and petrol rises, I was looking for a second income in a job I would enjoy. I'm fairly young, fit, and active and believe id fit the reserve mould well.

27 days at £51.22 a day = £1,382.94 @ 20% tax = £1,106.35
27 days at £51.22 a day = £1,382.94 @ 40% tax = £829.76
plus 1st-year tax-free bounty £470

So real-world earnings...

£1,576 1st-year earnings or take-home post 20% tax £130 a month / £58.37 a day?
£1,299 1st-year earnings or take-home post 40% tax £108 a month / £48.13 day?

The 27 days is an assumption of 1 drill night a week and 1 weekend a month - can someone elaborate if there are more hours available?

Can an active reservist check my maths?

 

[RumRationReject]

Er, not that easy, I am afraid.

I cant speak for the 27 days, as I am not AR, that would be for your unit to decide.

Tax, however...
If you already have a civvy job then your tax free allowance (£12,570 from April this year) may well have already been "consumed" by your first employer. The amount you earn will, of course impact on what your first job earns you.

So, whilst your calculations may well be overtly correct, your reserve pay will be taxed at BR; the tax often impacts greater than your regular counterpart. Best advice is to run the figures from both employments over a qualified accountant if the aggregate £ per day is going to influence your decision.

 

[Rich - 7]

Thank you for the response, @RumRationReject

I ran over the numbers with my brother who's an accountant and he just noted;

27 days at £51.22 a day = £1,382.94
@ 20% tax = £276.58
@ 15% NI £207.44
@ 3% Pension £41.48 (assumed)
27 days Net Take home = £857.44
Daily pay after deductions £31.75

Does £30 a day take home to a private look correct to anyone, I would assume the unit will pay for your fuel in line with the HMRC fuel rates which given the times is lower than the actual price of fuel.

It seems the Reserves is more of a hobby than a second income?! Like i said i do not want to appear on here as using money as the only incentive to join up, but how can you convince your Mrs your going away for the weekend for £30 a day when you could have alternative second job.

Any other inputs or help on this? I genuinely would love to make this word and join up.

 

[Serpico]

It seems the Reserves is more of a hobby than a second income?!

That's exactly it mate, although perhaps calling is more suitable than hobby

 

[tommikka]

Thank you for the response, @RumRationReject

I ran over the numbers with my brother who's an accountant and he just noted;

27 days at £51.22 a day = £1,382.94
@ 20% tax = £276.58
@ 15% NI £207.44
@ 3% Pension £41.48 (assumed)
27 days Net Take home = £857.44
Daily pay after deductions £31.75

Does £30 a day take home to a private look correct to anyone, I would assume the unit will pay for your fuel in line with the HMRC fuel rates which given the times is lower than the actual price of fuel.

It seems the Reserves is more of a hobby than a second income?! Like i said i do not want to appear on here as using money as the only incentive to join up, but how can you convince your Mrs your going away for the weekend for £30 a day when you could have alternative second job.

Any other inputs or help on this? I genuinely would love to make this word and join up.

It could be worth checking the pension element (I understand that the reserves pension just like Regulars will be non-contributory)

It’s not a lot of money when compared to a different type of ‘second job’, but what second job takes one evening per week plus one weekend per month?

 

[Daxx]

I think you need to reassess what you think the reserves are. You sign up to kill the Queen's enemies when she sees fit. It is not a second job and the latest direction regarding how the regulars and reserves will work together makes this abundantly clear.

If you want a second job for just income, go work for Tesco at the weekends.

 

[Ravers]

Your numbers look about right. And you’re correct, fuel costs for commuting are covered up to a certain amount.

To be honest you’ll probably be worse off financially in your first year or two. Once you factor in a few pints in the bar after a training night, the summer piss up, the Christmas piss up, some extra Gucci kit that you’ll want to buy to make your life more comfortable in the field, a few sports trips, the post exercise weekend Maccy dees etc. etc. it all starts to add up.

My TA unit was very active on the social side and I was probably spending 5 grand a year on balls, dinners, ski trips and playing sport. Obviously not all units are like this, but you can expect quite a few hidden costs that you won’t have factored in to your calculations.

Realistically you don’t really make any money until you’re hitting top whack bounty in year 4 and even then it’s hardly worth the hassle.

If extra cash is your main motivation for joining, then you’re better off doing a few shifts in Burger King. If it’s for the camaraderie and enjoyment of doing something worthwhile, that not a lot of people get to experience, then crack on.

 

[RumRationReject]

My TA unit was very active on the social side and I was probably spending 5 grand a year on balls, dinners, ski trips and playing sport.

Yeah, but your former TA unit is somewhat " special"!

@Rich - 7
As discussed, you wont see any pension deduction's, your pay will rise as you get promoted, and your bounty will rise as the years pass - Has it reached about £1,900 now tax free? Being a reservist is not a money spinner. Those who get more RSD's a year probably work pretty hard for it (CO's and so forth).

Whilst the commitment is variable in future years Phase One is pretty strict, so you will need to commit. Those who join the reserves for an income lift rarely survive long, in my experience. I would have typed what Ravers did, if I had any brains.

 

[Rich - 7]

Hi All,

Thank you for your replies and insights.

I served for 7 years fulltime in the RAF so more than aware of the potential social element and shelling out for gucci kit!

I am going to look into something else for the time being in terms of a second income and reassess in a year or so.

Cheers.