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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: 2001/02 completion of form P11

Earnings Details

Column 1a: Earnings at the LEL

Where earnings in the pay period reach or exceed the LEL, the LEL should be inserted here. For example, if the earnings are £100.00, the entry will be £72.00. If the earnings in the pay period do not reach the LEL, the columns should be left blank.

This column must be completed and reported at the year-end even if the employee earns exactly at the LEL and pays no NICs. Columns 1b to 1g will be left blank. This information will protect the employee’s entitlement to benefit, which is still related to earnings at the LEL, and for calculating average weekly earnings for Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP).

Column 1b: Earnings above the LEL, up to and including the PT/ST (or ‘ET’)

Where earnings in the pay period reach or exceed the LEL, the figure to be inserted here is the difference between those earnings and the LEL - up to the ceiling of the ET. For example, if weekly earnings are £80.00, the entry will be £8 (£80 - £72); if weekly earnings are £100, the entry will be £15 (£87 - £72). If the employee’s earnings are constantly above the ET, the figure entered will be the same each pay period, for example £15.

This column must be completed and the total reported at the year-end, even if the employee earned exactly at or below the ET and paid no NICs. This is to protect the employee’s entitlement to benefit and for calculating average weekly earnings for SSP and SMP. This information is also needed to calculate the correct amount of employee’s and employer’s NIC rebates.

If the NI Tables were used, the amount to be entered should be in whole £s. If the exact percentage method was used, the entry will be in £s and pence.

Column 1c: Earnings above the ET, up to and including the Upper Earnings Limit (UEL)

Where earnings in the period exceed the ET, the figure inserted here is the difference between those earnings and the ET - up to the ceiling of the UEL. For example, if weekly earnings are £87, the column will be blank ; if they are £100, the entry will be £13 (£100 - £87). If the employee’s earnings are constantly above the UEL, the figure entered should be the same in each pay period, for example £488 (£575 - £87).

If the NI Tables were used, the amount entered should be in whole £s. If the exact percentage method was used, the entry will be in £s and pence.

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National Insurance contribution details

Column 1d: Total of employee’s and employer’s contributions payable

The figure inserted here is the combined total of primary (employee’s) and secondary (employer’s) NICs payable. It should be shown in £s and pence.

Column 1e: Employee’s contributions payable on earnings in 1c (before deducting employee’s NIC rebate in 1f)

The figure inserted here, in £s and pence, is the employee’s portion included in column 1d. Examples of how to calculate and record the NIC rebate can be found in NIM11025 onwards.

Column 1f: Employee’s NIC rebate due on earnings in 1b (deducted from contributions in 1e)

This column can only be used for those employees who are members of their employer’s contracted-out occupational pension scheme.

The figure to be inserted here is the amount of NIC rebate due to the employee on the earnings between the LEL and the ET. Only the value of the employee’s NIC rebate that is deducted from the contributions payable by the employee and recorded in column 1c should be entered.

Where there are no employee’s contributions due, the full value of the employee’s NIC rebate is available to the employer and the entry will be NIL. In this latter scenario the value of the employee’s NIC rebate is added to that of the employer and entered in column 1g. The employer will have subtracted the NIC rebate from the overall NICs bill when making payments to the Department.

Column 1g: Employer’s NIC rebate due on earnings in 1b and any balance of employee’s NIC rebate due but not shown in 1f

This column can only be used by those employers who operate a contracted-out occupational pension scheme.

The figure to be inserted here will be the amount of the employer’s NIC rebate due to the employer on earnings between the LEL and the ET - although there will be no employer’s contributions due on those earnings.

Where none - or only part - of the employee’s NIC rebate is used to off-set the contributions payable by the employee, any balance will be added to the employer’s NIC rebate and recorded in this column.

The employer will have subtracted the total NIC rebate from the overall NICs bill when making payments to the Department.

Note - The Employer’s Help Cards (CWG1) advise employers that where employees are members of their contracted-out occupational pension scheme, they should be able to identify from their payslips the amount of employee’s NIC rebate that has been deducted from their contributions paid.