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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1: calculating & recording earnings, NICs & NIC rebates: rates, limits, thresholds, rebates and P11 completion: 1996/97 examples using exact percentage method

Example 1 - Not contracted-out NICs

Earnings £115.00            
               
Earnings period Weekly            
Employee’s NICs due £61.00 (LEL) x 2% = £1.22  
  £54.00 (£115 - LEL) x 10% = £5.40  
            £6.62  
Employer’s NICs due £115.00   x 5% = £5.75  
Total NICs due £6.62 + £5.75 = £12.37
           

Example 2 - Contracted-out NICs

Earnings £1251.75          
             
Earnings period Monthly          
Employee’s NICs due £265.00 (LEL) x 2% = £5.30
  £986.75 (£1251.75 - LEL) x 8.2% = £80.91
            £86.21
Employer’s NICs due £265.00 (LEL) x 10.2% = £27.03
  £986.75 (£1251.75 - LEL) x 7.2% = £71.05
            £98.08
Total NICs due £86.21 + £98.08 = £184.29