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Old 23rd Apr 2013, 19:38
  #926 (permalink)  
my_call
 
Join Date: Jun 2012
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Ok, this may not answer your question again, but I thought it may be helpful to some, as topics of a similar nature have been brought up a number of times before . Based on my own understanding, this is how I would calculate pay for a new FPP entrant.

Income:

Gross Salary = FFP Basic Salary + Flying Pay Supplement (FPS)
Allowance = Time Away From Base (TAFB)

Net Income = Gross Salary - Income Tax on Gross Salary + 72% of TAFB + Bond Reimbursement

Non-Tax Deductions:

Loan Instalments = Bond Amount + 2 years interest (assuming deferred payments) amortised over agreed term at agreed interest rate
Actual Duty Spending = Money spent as a necessity of being on duty, over and above normal subsistence when not flying

Take Home Earning = Income - Non-Tax Deductions = Net Income - Loan Instalment - Actual Duty Spending

The main variable on an annual basis would be the increasing net income

Some rough rough monthly numbers:

Net Monthly Income = 23000/12 (net FPS +TAFB, very rough without knowing accurate figures) + 1000 (bond reimbursement) = 2917

based on assumptions:
FPP Basic Salary = 22760
Income Tax on Gross Salary = ~23% using an income tax calculator such as Income Tax Calculator

Loan Amount at first instalment = 84000 + 3360 x 2 = 90720
Loan Instalments = 1240 x 84 monthly payments, using a loan calculator such as Mortgage Calculator: Simple calculator for repayment & interest only mortgages...

based on assumptions:
Instalment Term = 7 years
Interest Rate = 4%
Full bond taken out
Fees and charges not included

Take Home Earning = 2917 - 1240 - Actual Duty Spending = 1677 - Actual Duty Spending

As a point of reference, using the income tax calculator above:

a monthly net of 1677 is equivalent to a starting gross salary (allowance included) of £25,500 - in this scenario one looks at it as a lower wage, but with BA paying back the entire loan and interest with 7 years service, akin to full sponsorship

a monthly net of 2917 is equivalent to a starting gross salary (allowance included) of £48,250 - in this scenario one looks at is as a higher wage, but with one having to pay the full loan by self

Actual Duty Spending effectively reduces the figures in above paragraph.

So my conclusion is that it all depends on which perspective one decides to view the bond from, but either way it's not a bad deal.
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