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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1 Structural Overview - post April 2003: Structural changes: the Class 1 and 2 maximum: Example: Four Class 1 employments: Maximum not reached

Example 6

H Harris has four part-time jobs. In each he earns £150 per week. His maximum Class 1NICs liability is calculated as follows:

Step 1

Deduct the relevant Primary Threshold from the relevant UEL and multiply that figure by53.

595 - 89 = 506 x 53 = 26818

Step 2

Multiply the result of step 1 by 11 per cent

26818 x 11% = 2949.98

Step 3

Add together so much of the person’s earnings from each employed earner’semployment as exceeded the Primary Threshold but did not exceed the Upper Earnings Limit.

150 (weekly earnings) - 89 (weekly PT) = 61 x 208 (weeks) = 12688

Step 4

Deduct from the total found at step 3 the amount produced by step 1

12688 - 26818 = minus 14130

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

Nil

Step 6

Add together so much of the person’s earnings from each employment as exceeded theUpper Earnings Limit.

There are no earnings above the UEL

Step 7

Multiply the result of step 6 by 1%

Not applicable

Step 8

Add together the results of steps 2, 5 and 7.

£2949.98 + nil + nil

H Harris’ maximum for the 2003/2004 tax year is £2949.98.

The amount of primary Class 1 NICs the employee will pay in each employment on earnings of£150 will not reach the prescribed maximum but Mr Harris will have met his full Class 1liability.