NIM01222 - 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 Braddock is an employee with earnings of £5,000 per month. He is employed for the whole of the 2020-2021 tax year.

In April 2020 the following primary Class 1 NICs will be due:

Earnings on which the main primary percentage is payable:

£4167 (monthly UEL) less £792 (monthly PT) = £3,375

£3,375 x 12% (main primary percentage) = £405.00

Earnings on which the additional primary percentage is payable:

£5000 (total earnings) less £4167 (monthly UEL) = £833.00

£833 x 2% (additional primary percentage) = £16.66

Total primary payable for April 2020 = £421.66 (that is £405.00 + £16.66)

As Mr Braddock remains employed for the whole of the 2020-2021 tax year with the same employer, the following primary Class 1 NICs will be due:

£421.66 x 12 monthly deductions = £5059.92

For the 2020-2021 tax year, Mr Braddock will have paid:

• main primary NICs amounting to £4860.00
• additional primary NICs amounting to £199.92

See NIM01221 for general information relating to this example.