Wages, turnover, expenses and profit
- Wages
- Money an employer pays you for the time you work. Your payslip shows your gross pay, before deductions, and your take-home pay, which is what reaches your bank.
- Turnover
- All the money a business takes from customers, before it pays for anything.
- Expenses
- The costs of running the business, such as materials, stall fees, delivery and card payment fees.
- Profit
- What is left from turnover after expenses. If you work for yourself, profit is your income, and tax is worked out on your profit.
Example 1: a paid job
You are 19 and work 12 hours a week in a shop. From 1 April 2026, the legal minimum for your age is £10.85 an hour.
| Hours worked | 12 |
|---|---|
| Hourly rate | £10.85 |
| Gross pay | £130.20 |
Your employer may take Income Tax and National Insurance from your gross pay, depending on how much you earn. What is left is your take-home pay. Your payslip shows both.
Example 2: a market stall
You sell upcycled tote bags at a weekend market for one month.
| Turnover: 40 bags at £12 | £480 |
|---|---|
| Materials | £150 |
| Stall fees | £100 |
| Card payment fees | £14 |
| Total expenses | £264 |
| Profit | £216 |
Your income is the £216 profit. The £480 turnover is not your income, because £264 of it paid for the business.
If running the stall took 30 hours that month, the profit works out at £7.20 an hour. That is less than the legal minimum hourly rate for any age. Minimum wage rules apply when someone employs you. When you work for yourself, your hourly income depends on your prices, your costs and your time, so check the numbers before you start.
If your income from self-employment is more than £1,000 in a tax year, counted before expenses, you need to register for Self Assessment with HMRC.
Read about the £1,000 trading allowance on GOV.UK (opens in a new tab)
The numbers in these examples show how the words work. They are examples only.
Fair pay
The law sets a minimum hourly rate that depends on your age. From 1 April 2026:
- £12.71 if you are 21 or over
- £10.85 if you are 18 to 20
- £8 if you are under 18
- £8 for apprentices aged under 19, or aged 19 or over in the first year of their apprenticeship
Any paid role arranged through NEET to OPPORTUNITY pays at least the legal minimum for your age.
National Minimum Wage and National Living Wage rates on GOV.UK (opens in a new tab)
Paid co-design
Some SHAPE work, such as testing a website or reviewing a service with other young people, is paid when payment is agreed in advance. Before any piece of work starts, you are told whether it is paid, how much and how you will be paid.
Work experience and pay
Some experience is unpaid, such as shadowing someone at work or a taster day. Unpaid experience is not employment. We tell you whether something is paid before it starts.
If you are doing real work as a worker, the law usually entitles you to the minimum wage.
Read the rules for interns and work experience on GOV.UK (opens in a new tab)
Budgeting and confidence with money
EARN includes practical support with money, such as reading a payslip, planning a budget and understanding tax.
If you get benefits or need support at work
Earning can change benefit payments. If you get Universal Credit, your payment goes down by 55p for every £1 you earn from work. Some people can earn a set amount first, called a work allowance.
How wages affect Universal Credit on GOV.UK (opens in a new tab)
If you are 16 or over and have a disability or health condition, Access to Work can help pay for practical support in paid work, including apprenticeships and paid work experience.
Access to Work on GOV.UK (opens in a new tab)