Calculating NI

Randomface74 · 2 Apr 2011 at 16:28

I'm trying to calculate the amount of my income that goes to National Insurance every year.

I'm using information from the following to help:
http://www.hmrc.gov.uk/rates/it.htm
http://www.hmrc.gov.uk/rates/nic.htm
http://www.thesalarycalculator.co.uk/salary.php
http://www.thesalarycalculator.co.uk/about.php

My current understanding is:

(I) Income: 38,000
(PA) Personal Allowance: 7,475
(NI) National Insurance: 11%

That should result in a formula like this: (I-PA)*NI = £3,358

But thesalarycalculator says the answer is: £3,693.00

Can anyone explain where I'm going wrong?
I also don't know if pension contributions should be excluded from income or not.

Randomface74 · 2 Apr 2011 at 16:40

Correction: in 2011-2012, NI is 12%

Following my formula above that gives £3,663

Which still isn't right.

muon · 2 Apr 2011 at 17:04

NI allowance =! personal income tax allowance

That's what I thought.

edit:

http://www.hmrc.gov.uk/ni/intro/basics.htm#4

£110 a week ~ £5720

Vonhelmet · 2 Apr 2011 at 17:05

Is the NIC threshold the same as the personal allowance? Are you hitting the upper limit for main rate NIC?

Destination · 2 Apr 2011 at 17:07

First, are you self employed?

Randomface74 · 2 Apr 2011 at 17:13

ghost101 said:
NI allowance =! personal income tax allowance

That's what I thought.

edit:

http://www.hmrc.gov.uk/ni/intro/basics.htm#4

£110 a week ~ £5720

perfect answer, for 2011-2012 it's 139 per week, which is 7,228 per year, which gives me exactly the same result as the website I was using.

It's called the "Primary threshold" - which is not the same thing as the "Personal Allowance" which is used for Income Tax.

DAIR · 6 Apr 2011 at 09:26

http://listentotaxman.com/index.php

Best site for calculating tax AND ni.

Looks as though Im a few pounds better off

thanks to the new change!