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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
, see all updates

Class 1: calculating & recording earnings, NICs & NIC rebates: rates, limits, thresholds, rebates and P11 completion: 1997/98 examples using exact percentage method

Example 1 - Not contracted-out NICs

Earnings £500.15            
               
Earnings period Weekly            
Employee’s NICs due £62.00 (LEL) x 2% = £1.24  
  £403.00 (UEL - LEL) x 10% = £40.30  
            £41.54  
Employer’s NICs due £500.15   x 10% = £50.01  
Total NICs due £41.54 + £50.01 = £91.55
           

Example 2 - Contracted-out NICs (COMP scheme)

Earnings £500.00          
             
Earnings period Monthly          
Employee’s NICs due £269.00 (LEL) x 2% = £5.38
  £231.00 (£500 - LEL) x 8.4% = £19.40
            £24.78
Employer’s NICs due £269.00 (LEL) x 5% = £13.45
  £231.00 (£500 - LEL) x 3.5% = £8.08
            £21.53
Total NICs due £24.78 + £21.53 = £46.31