Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
, see all updates

Class 1 structural overview from 6 April 2009: assessing primary Class 1 NICs from 6 April 2009: example: earnings are consistently above the Upper Earnings Limit - not contracted out

Mr B Braddock is an employee in a non contracted-out employment with earnings of £4,000 per month. He is employed for the whole of the 2012/2013 tax year.

In April 2012 the following primary Class 1 NICs will be due:

Earnings on which the main primary percentage is payable:

£3540 (monthly UEL) less £634 (monthly PT) = £2906

£2906 x 12% (main primary percentage) = £348.72

Earnings on which the additional primary percentage is payable:

£4000 (total earnings) less £3540 (monthly UEL) = £460

£460 x 2% (additional primary percentage) = £9.20

Total primary payable for April 2012 = £357.92 (that is £348.72 + £9.20)

As Mr Adams remains employed for the whole of the 2012/2013 tax year with the same employer, the following primary Class 1 NICs will be due:

£357.92 x 12 monthly deductions = £4295.04

For the 2012/2013, Mr Braddock will have paid:

  • main primary NICs amounting to £4184.64
  • additional primary NICs amounting to £110.40

See NIM01221 for general information relating to this example.