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.