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Class 1 Structural Overview - post April 2003: Structural changes: The Class 1 and 2 maximum: Examples: Three Class 1 employments: Fluctuating earnings
Example 3
E Evans has three separate employments. His total earnings for the 2003/2004 tax yearare £72,000. He is paid monthly in each job. In each employment he receives fluctuatingearnings.
His earnings are as follows:
| Job 1 | Job 2 | Job 3 | |||||||
| Earnings | Total | PT to UEL | Over UEL | Total | PT to UEL | Over UEL | Total | PT to UEL | Over UEL |
| April 03 | 300 | - | - | 2500 | 2115 | - | - | - | - |
| May 03 | 600 | 215 | - | 6000 | 2194 | 3421 | - | - | - |
| June 03 | 320 | - | - | 2500 | 2115 | - | - | - | - |
| July 03 | 850 | 465 | - | 2500 | 2115 | - | - | - | - |
| Aug 03 | 750 | 365 | - | 6000 | 2194 | 3421 | - | - | - |
| Sept 03 | 430 | 45 | - | 2500 | 2115 | - | 3000 | 2194 | 421 |
| Oct 03 | 700 | 315 | - | 2500 | 2115 | - | 2000 | 1615 | - |
| Nov 03 | 1000 | 615 | - | 6000 | 2194 | 3421 | 3200 | 2194 | 621 |
| Dec 03 | 800 | 415 | - | 2500 | 2115 | - | 2500 | 2115 | - |
| Jan 03 | 1200 | 815 | - | 2500 | 2115 | - | 2600 | 2194 | 21 |
| Feb 03 | 1400 | 1015 | - | 6000 | 2194 | 3421 | 3000 | 2194 | 421 |
| Mar 03 | 350 | - | - | 2500 | 2115 | - | 3000 | 2194 | 421 |
| Total | 8700 | 4265 | - | 44000 | 25696 | 13684 | 19300 | 14700 | 1905 |
| Aggregate | £72,000 |
To establish the earnings on which the maximum is based it is necessary to establishthe:
- aggregate amount of earnings from each job which are between the Primary Threshold and the Upper Earnings Limit and
- aggregate amount of earnings from each job above the Upper Earnings Limit
| Total aggregate earnings | Aggregate earnings between PT and UEL | Aggregate earnings over UEL |
| £72,000 | £44661 (4265 + 25696 + 14700) | £15589 (nil + 13684 + 1905) |
Step 1
Deduct the relevant Primary Threshold from the relevant Upper Earnings Limit andmultiply that figure by 53.
595 - 89 = 506 x 53 = 26818
Step 2
Multiply the result of step 1 by 11%
26818 x 11% = 2949.98
Step 3
Add together so much of the persons earnings from each employed earnersemployment as exceeded the Primary Threshold but did not exceed the Upper Earnings Limit.
4265 (job 1) + 25696 (job 2) + 14700 (job 3) = 44661
Step 4
Deduct from the total found at step 3 the amount produced by step 1
44661 - 26818 = 17843
Step 5
If the figure produced at step 4 is a positive figure multiply that figure by 1%
If the figure produced at step 4 is a negative figure, it is treated for thepurposes of step 8 as nil
17843 x 1% = 178.43
Step 6
Add together so much of the persons earnings from each employment as exceeded theUpper Earnings Limit.
Nil (job 1) + 13684 (job 2) + 1905 (job 3) = 15589
Step 7
Multiply the result of step 6 by 1%
15589 x 1% = £155.89
Step 8
Add together the results of steps 2, 5 and 7.
£2949.98 + 178.43 + 155.89 = 3284.30
E Evanss maximum for the 2003/2004 tax year is £3284.30.