Financial Apendix 2

[szofar]

Im sorry but this question has been asked many of times but trying to understand the 2 questions in Appendix 2


3.11 What is your sponsor’s annual income from this employment before tax?

3.20 What was your sponsor’s total income (before tax) from salaried employment in the 12
months prior to the application?

My understanding is please correct me if im wrong for 3.20 it makes sense to divide monthly wage and multiply by 12 because that is prior to the application as stated in the question.

Now for 3.11 annual income before tax what dates are they refering from ie April ending etc etc what actual figure do you input?

Iv read in various forums that in 3.11 they input monthly wage dived by 6 multiply by 12 and leave 3.20 blank

Please enlighten me

[seagul]

In my point of view if you are relying category A because of working for same employer from 6 months then after filling 3.11 & 3.12 section then you should straight refer to 3.21 by leaving 3.20.
And regarding annual wages the figure must be the annual contractual gross wages (if salaried person/fixed wages) otherwise (non-salaried/variable wages) you and/or your employer need to calculate your annual wages by taking the average by the formula you already knew as below:

Total of last 6 months wages/6×12= £££

[szofar]

Thanks seagul for clearing that up

can holiday pay be added to your income to meet the threshold like overtime???

if yes how is it calculated if its overtime it is overtime /6 x12 then added to your gross income

if for example on one payslip theirs holiday pay do you add it to the total gross amount???

[seagul]

Thanks seagul for clearing that up

can holiday pay be added to your income to meet the threshold like overtime???

if yes how is it calculated if its overtime it is overtime /6 x12 then added to your gross income

if for example on one payslip theirs holiday pay do you add it to the total gross amount???

Yes paid holidays are allowed to add up exactly the same way like other wages amount. For example 5 months you have worked except 1 month when you gets paid holidays then you should add up the figures of all 6 months then divide by 6 then multiply by 12 to get annual wages.

NOTE: Above advice is based on belief that you are earning variable income and with present employer from at least 6 months. Also bear in mind that if you gets wages weekly/fortnightly/4 weekly then you have to convert it into months.

[szofar]

For example
6 wage slips variable gross pay from 1150 to 1650 per month and variable overtimes on 1 payslip ther is 347 holiday pay

Am i correct to calculate
Un salaried route
Total gross income divide by six and multiply buy 12

Then add total overtime to total gross income

Then add hoilday pay amoount to total

Am i correct with the calculation????

[szofar]

Please can anyone correct me on my post

Thanx

[seagul]

For example
6 wage slips variable gross pay from 1150 to 1650 per month and variable overtimes on 1 payslip ther is 347 holiday pay

Am i correct to calculate
Un salaried route
Total gross income divide by six and multiply buy 12

Then add total overtime to total gross income

Then add hoilday pay amoount to total

Am i correct with the calculation????

No. You misunderstood. You need to add up all of the 6 monthly basic wages + overtimes + paid holidays then divide by 6 then multiply by 12 to get the annual income figure under non-salaried person route.

[szofar]

Thats great Seagul yur a star alot clearer now

So if you are paid 4 weekly. Do you first convert 6 x 4 weekly to monthly ÷ 6 x 12 and then + overtime + holiday pays??

Or 4 weekly wage + overtime + holiday pay and then convert to monthly???

[AmazingSully]

Assuming you are applying under Category A, it depends if you are salaried or non-salaried. If you check out section 5.1 of the Appendix FM 1.7 you will see that salaried and non-salaried income is calculated differently. Once you have your base salary calculated, you then add overtime to that, calculated in the same way non-salaried income is calculated.

So if you are non-salaried (and paid monthly), you simply add up your wages from the 6 months, divide by 6 and multiply by 12.

If you are salaried however things change. Your income is then calculated by taking the lowest month's salary (if your payslip states "salary", then it will be the lowest of these in the 6 months). That figure is then assumed for all 6 months. So let's my payslips state my salary for each month as follows:

April - £1500
May - £1700
June - £1800
July - £1800
August - £1800
September - £1800.

My base salary would be £1500 x 12 = £18000.

If my paystub shows I am paid by the hour, and it is calculated as such, then I would have a base income of:

((£1500+£1700+£1800+£1800+£1800+£1800) x 6) / 12 = (£10400 x 6) / 12 = £20800.

Now you could claim variable income and apply under Category B, but it's possible you may fail that if you are near the border with income.

Overtime however is calculated like non-variable income. So let's assume your payslip states the salary above, month over month, and also states overtime as follows:

April - £15
May - £100
June - £85
July - £50
August - £75
September - £75.

Then, your base salary is still £18000, however we have to add the overtime to your income. Overtime is then calculated like non-salaried employment and so we have:
((£15 + £100 + £85 + £50 + £75 + £75) x6 ) / 12 = (£400 x 6) / 12 = £800.
Your total income then under Category A would be £18000 + £800 = £18800, meeting the requirement.

EDIT: Regarding your question about being paid every 4 weeks. If this is the case you would take your last 7 pays and calculate as follows for non-salaried income:

((pay over the last 7 pays) / 28) * 52.

[szofar]

Thanx AmazingSully

I can see your formula as multiply by 6 and divided by 12

in the FM 1.7 it states total divide by 6 multiply by 12

is that correct or an error??

[szofar]

also in FM 1.7

it states regarding overtime

" All overtime in salaried employment will be calculated based on the
approach to income from non-salaried employment. This will be an annualised 6-month
average for the overtime which will be added to the level of the gross annual salary"

so my understanding is work out average wages ie total divide by 6 multiply by 12

same with overtime and holiday pay total overtime divide by 6 multiply by 12 and finaly add it to the salary

please correct me if im incorrect

[seagul]

What you are failing to understand that whether you opting salaried/non-salaried route. Because there is a calculation difference and don't be puzzled with the paid holidays figures which will straight be added up towards remaining wages. But be careful in choosing salaried/non-salaried route because if you chose the salaried person then HO might take the lowest wages from the last 6 months which might fail you to meet financial requirement. Therefore, if your monthly wages are not identical & varies each month then preferably use non-salaried person route despite you have fixed wages contract because in that case instead the lowest wages figure the average wages figure will be taken by:

Base wages + overtime+ holidays/6×12= ££££

[AmazingSully]

Thanx AmazingSully

I can see your formula as multiply by 6 and divided by 12

in the FM 1.7 it states total divide by 6 multiply by 12

is that correct or an error??

Apologies, I did mean divide by 6 and multiply by 12 throughout. I'll edit.

EDIT: NVM can't edit.

[AmazingSully]

What you are failing to understand that whether you opting salaried/non-salaried route. Because there is a calculation difference and don't be puzzled with the paid holidays figures which will straight be added up towards remaining wages. But be careful in choosing salaried/non-salaried route because if you chose the salaried person then HO might take the lowest wages from the last 6 months which might fail you to meet financial requirement. Therefore, if your monthly wages are not identical & varies each month then preferably use non-salaried person route despite you have fixed wages contract because in that case instead the lowest wages figure the average wages figure will be taken by:

Base wages + overtime+ holidays/6×12= ££££

Regarding this, I am actually a bit confused. I didn't see anywhere on the forms where you get to choose between salaried and non-salaried, I was under the impression that was dependent on your paystubs which need to be submitted for evidence. For instance in my personal situation, my paystubs say "salary -  ££££", in which case mine would be calculated as salaried income is.

[seagul]

What you are failing to understand that whether you opting salaried/non-salaried route. Because there is a calculation difference and don't be puzzled with the paid holidays figures which will straight be added up towards remaining wages. But be careful in choosing salaried/non-salaried route because if you chose the salaried person then HO might take the lowest wages from the last 6 months which might fail you to meet financial requirement. Therefore, if your monthly wages are not identical & varies each month then preferably use non-salaried person route despite you have fixed wages contract because in that case instead the lowest wages figure the average wages figure will be taken by:

Base wages + overtime+ holidays/6×12= ££££

Regarding this, I am actually a bit confused. I didn't see anywhere on the forms where you get to choose between salaried and non-salaried, I was under the impression that was dependent on your paystubs which need to be submitted for evidence. For instance in my personal situation, my paystubs say "salary -  ££££", in which case mine would be calculated as salaried income is.

There is a major continuous flaw on the form that there is no option for non-salaried person but still with the above formula you and/or your employer need to calculate & indicate it on the form.

[szofar]

My understanding is you need a clear and precise employment letter where it states either yearly fix salary or either hourly rate ( also must state hourly rate on your payslips)

under the above assumption the ECO will calculate salaried route for yearly fixed salary or an non salaried route for a hourly rate.

best way forward is to calculate it yourself on a sheet of paper headline it non salaried or salaried route