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HMRC internal manual

National Insurance Manual

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

Mr M Murdock is an employee in a non contracted-out employment with earnings of £3,000 per month. He is employed for the whole of the 2012/2013 tax year and in March 2013 receives his annual bonus of £12000.

From April to February 2013 the following primary Class 1 NICs will be due:

Earnings on which the main primary percentage is payable:

£3000 (monthly earnings) less £634 (monthly PT) = £2366

£2366 x 12% (main primary percentage) = £283.92

Total primary payable from April to February = £3123.12 (283.92 x 11)

In March the following primary 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:

£15,000 (total earnings) less £3540 (monthly UEL) = £11460

£11460 x 2% (additional primary percentage) = £229.20

Total primary payable for March = £577.92 (that is £348.72 + £229.20)

Total primary payable for 2012/2013 = £3701.04 (that is £3123.12 + £577.92)

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

  • main primary NICs amounting to £3471.84 (that is, £3213.12 + £348.72)
  • additional primary NICs amounting to £229.20

For general information relating to this example see NIM01221.