Glossary: T

TAKE HOME PAY

The money you actually get paid after deductions such as income tax and National Insurance Contributions.

TAXATION LOCAL

You may pay local taxes such as Council tax. This money is used to pay for local services such as libraries and the police.

TAXATION NATIONAL

You are taxed in a variety of ways, for example, by paying income tax on your wages, by paying VAT when you buy certain goods, by paying the road fund licence for a car. These taxes are used to finance services such as the National Health Service, Armed Forces and education which are of benefit to everyone.

TAX CODE

This code, with special tables, tells your employer how much tax-free pay to give you each pay period. Your tax code is worked out from your tax allowances and other tax adjustments.

TAX THIS PERIOD

Shown on a pay slip - how much income tax you have to pay this pay period. It is worked out from tables using your tax code.

TAX YEAR

A 12 month period running from 6th April one year to 5th April the next year. Taxes, such as income tax, are worked out over this period.

TENANT

Someone who rents where they live.

TERM

The time for which something lasts e.g. how long you have to pay back a loan.

TERM OF THE LOAN

Generally, the longer the period you borrow the money for, the lower the interest rate. But this will still add up over the time that you're paying the money back.

THIRD PARTY INSURANCE

Third party insurance means that your insurance company will pay out if you accidentally cause damage to another person or their car. Adding in 'fire and theft' means that your car is covered should it be stolen or damaged by fire.

TOTAL DEDUCTIONS

On a pay slip - this is the total amount that will be taken from your gross pay. What is left after this is your take-home pay.

TRANSACTION

Any payment in or out of your account.

TRAVEL INSURANCE

When you travel abroad you may want to take out travel insurance. Many countries will not treat you if you have an accident or fall ill unless you can pay - and medical bills can be extremely expensive. Some travel insurance policies will cover such events as the cost of flying you home if necessary, reimbursement for lost luggage or cancelled flights. As with all insurance policies, it is important to understand exactly what is covered.

Adapted from Money matters to me. Used with permission. Back to top