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HMRC internal manual

Employment Status Manual

From
HM Revenue & Customs
Updated
, see all updates

Managed Service Companies (MSC): Step by Step Guide for working out the DEP and Employer’s Class 1 NICs

The following table provides a step by step framework for working out:

  • the Deemed Employment Payment; and
  • Employer’s Class 1 NICs on that payment
Enter in this box the earnings to date (a) 1
   
Enter in this box the amount at Step Three (b) 2
Enter in this box the Employer’s Class 1 NICs earnings threshold at the date the payment or benefit is received by the worker 3
Enter in this box the secondary Class 1 NICs percentage rate 4
Deduct the figure in box 1 from the figure in box 3 and enter the result in this box (e) 5
Deduct the figure in box 5 from the figure in box 2 and enter the result in this box 6
Multiply the figure in box 6 by 100 and enter the result in this box 7
Add 100 to the figure in box 4 and enter the result in this box 8
Divide the figure in box 7 by the figure in box 8 and enter the result in this box 9
Add the figure in box 9 to the figure in box 5 and enter the result in this box (c) 10
Deduct the figure in box 10 from the amount at box 2 (c) 11
  1. (a) this is the amount of earnings paid by the MSC to the worker during the year; including amounts previously subject to PAYE as DEPs
  2. (b) this is the amount you worked out at Step Three of the DEP calculation
  3. (c) this is the amount of the DEP
  4. (d) this is the amount of Employer’s Class 1 NICs due on the DEP
  5. (e) if the result is a negative number, enter zero in this box.