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HMRC internal manual

National Insurance Manual

Class 1: calculating & recording earnings, NICs & NIC rebates: national insurance tables method

How the NI tables work

The weekly tables are in earnings bands of £1 and the monthly tables in bands of £4. Therefore, the tables only show earnings figures in whole pounds. NICs are worked out on the mid-point of each band, except for those earnings at the lower earnings limit (LEL) and the upper earnings limit (UEL) when the NICs are worked out on the exact amounts. For example, in the weekly table, NICs for earnings of between £90 and £90.99 are worked out on £90.50.

The NI Tables have column headings which correspond with the column headings on the P11 Deductions Working Sheet. The NI Tables also include, for information only, a column showing the employer’s NICs. The employer calculates NICs by reading off the NICs due against the employee’s gross pay figure in the weekly or monthly table as appropriate. If the table does not show the exact gross pay figure, the employer uses the next smaller figure in the table. Because NICs are calculated on the mid-point in the Tables, there is often a slight difference between NICs calculated from the NI Tables and those calculated by the exact percentage method.

Earnings above the UEL

The NI Tables contain a calculator for working out employer’s and employees NICs where the employee’s earnings exceed the UEL. Employers can use the calculator for both weekly and monthly paid employees. Details of how to use the calculator are provided in the NI Tables.