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HMRC internal manual

National Insurance Manual

Class 1: calculating & recording earnings, NICs & NIC rebates: exact percentage method

Regulation 12(1), SS(C)R 2001

Employers who use the exact percentage must:

  • calculate the employee and employer NICs separately; and
  • round NICs calculations to the nearest penny (amounts of less than £0.005 are disregarded).

Regulation 12(1)(a) of the Social Security (Contributions) Regulations 2001 provides that primary and secondary contributions shall be calculated separately. Regulation 12(1)(b) provides that each such calculation shall be rounded to the nearest penny, with amounts of less than £0.005 being disregarded.