Basic principles: how to work out the deemed payment: step eight - example
This example is also reproduced at ESM8235 using a step by step guide.
Ms G is a worker whose service company has earned income from a relevant engagement. The service company paid her a salary of £3,000 during the year. The amount at Step Seven is £30,000. This produces the following figures:
x = Earnings to date 3,000
y = The amount at Step Seven 30,000
a = The secondary Class 1 NICs threshold 4,385
b = The secondary Class 1 NICs percentage rate 12.2%
Using the formula:
the deemed payment is equal to
The secondary Class 1 NICs payable in respect of the deemed payment are £3,112.