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HMRC internal manual

# Class 1 structural overview - From April 2009: structural changes: the Class 1 and 2 maximum: examples: three Class 1 employments: static earnings

## Example 2

J Howlett has three separate employments. Her total earnings for the 2011/2012 tax year are £97,200. She is paid the same monthly earnings in each job. Her maximum Class 1 liability is calculated as follows:

Step 1

Deduct the relevant Primary threshold from the relevant UEL and multiply that figure by 53.

817 - 139 = 678 x 53 = 35934

Step 2

Multiply the result of step 1 by 12%

35934 x 12% = 4312.08

Step 3

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

2700 (monthly earnings) - 602 (monthly PT) = 2098 x 12 x 3 = 75528

Step 4

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

75528 - 35934 = 39594

Step 5

If the figure produced at step 4 is a positive figure multiply that figure by 2%

If the figure produced at step 4 is a negative figure, it is treated for the purposes of step 8 as nil

39594 x 2% = 791.88

Step 6

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

There are no earnings over 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.

4312.08 + 791.88 + nil = 5103.96

J Howlett’s maximum for the 2011/2012 tax year is £5103.96