Another Dull Pay related plea for help !!

Rikwaller

Rikwaller

Rikwaller

Associate
Joined
9 May 2005
Posts
105
Hello

Can anyone shed any light on a query relating to NI contributions.

I earn approx 21 k per year excl bonuses. Today I got a large bonus making my gross pay this month over 7K.

I thought that NI is calculated at 11% over the allowance of £4895 per year.

It then reduces to 1% at £32,760 and above.

I have been charged NI calculated on an annual salary of £87921, so due to the rate reducing £32,760, I have only paid £301 NI. This is correct if I was earning £87921 but I will only earn approx £26K this year.

My query/question is will they claw back the balance I have not paid.

I initially thought they would but then found this on the T'internet ....

NICs have to be worked out on a payment-by-payment basis. The contributions are calculated as a percentage of an employee's gross pay above the LET, based on the interval which the payment covers.

Copied and pasted from www.yourpeoplemanager.com/Yf5RbGNoivVsHw.html

(Sorry do not know how to quote :confused: )

Your comments would be appreciated :D
 
Being self emplyed is great with regards to NI. £2.10 per week :D

I think NI is calculated monthly or weekly, depending on how you are paid by your employer. I could be mistaken though.
 
Rikwaller said:
Cheers Tesla, hopefully that means another £500 for me treat myself !!

Rik
Click to expand...

Like I said I am not 100% sure so maybe phone up the tax office and ask them to be doubly sure.
 
I plan to leave it in my savings account till I get my P60, just wanted to know the basis of calculation. Will be nice if you are correct.

Cheers Rik
 
NI is calculated on a per payment basis, not over an annual basis.

You get £94 a week before you pay NI, then pay 11% on everything over that up until £630. You then pay at 1% on everything over that.

So, my calculation is as folows, assuming pay of £7k in one month, assuming one month = exactly 4 weeks.

0% on £376 (£94 x 4) = £0.00
11% on £2144 ((630 - 94) x 4) = £235.84
1% on £4480 = £44.80

giving a total NI to be paid from this pay packet of £280.64, which is near enough to what you paid, based on the assumptions I have made.
 
You must log in or register to reply here.
Back
Top Bottom