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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: 1998/99 examples using exact percentage method

Example 1 - Not contracted-out NICs

Earnings £775.00          
             
Earnings period Monthly          
Employee’s NICs due £278.00 (LEL) x 2% = £5.56
  £497.00 (£775 - LEL) x 10% = £49.70
            £55.26
Employer’s NICs due £775.00   x 7% = £54.25
Total NICs due £55.26 + £54.25 = £109.51
           

Example 2 - Contracted-out NICs (COSR scheme)

Earnings £1100.00          
             
Earnings period Weekly          
Employee’s NICs due £64.00 (LEL) x 2% = £1.28
  £421.00 (UEL - LEL) x 8.4% = £35.36
            £36.64
Employer’s NICs due £64.00 (LEL) x 10% = £6.40
  £421.00 (UEL - LEL) x 7% = £29.47
  £615.00 (£1100 - UEL) x 10% = £61.50
            £97.37
Total NICs due £36.64 + £97.37 = £134.01