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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
, see all updates

Supporting Guidance: employer compliance: guidance by subject: computations: what to include for PAYE and NICs

There are no specific rules on how to lay out PAYE and NICs computations but you or the support officer preparing it will need to include the following headings

  • the type of inaccuracy
  • year
  • amount liable to tax
  • tax rate (whether lower, basic or higher rate)
  • tax due
  • earnings liable to NICs
  • NICs rate and class
  • NICs due.

However all the above are programmed in ECLSS (COG908010)

Computations involving NICs should wherever possible also include specific details about employees. For example

  • name
  • NINO
  • whether contracted out or not contracted out contributions apply
  • earnings band

You also need to obtain the total earnings in the year from NIRS2 to consider whether the extra earnings take the total income

  • above the lower earnings limit
  • above the employee’s earnings threshold
  • above the employer’s earnings threshold
  • above the upper earnings limit
  • An example of a computation is shown at COG908030.

For examples of how to create computations using ECLSS see ECLSS0480 to ECLSS0740 and for actual examples see ECLSS0940.