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HMRC internal manual

Employment Status Manual

Basic principles: how to work out the deemed payment: step eight - step by step guide

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

  • the deemed payment; and
  • secondary Class 1 NICs on that payment

Enter in this box the earnings to date (a)    1    

Enter in this box the amount at Step Seven (b)    2    

Enter in this box the secondary Class 1 NICs earnings threshold    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 (d)    11    

  • this is the amount of earnings paid by the intermediary to the worker during the year, apart from the deemed payment, subject to Class 1 NICs
  • this is the amount you worked out at Step Seven of the deemed payment calculation
  • this is the amount of the deemed payment
  • this is the amount of secondary Class 1 NICs due on the deemed payment

If the result is a negative number, enter zero in this box