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HMRC internal manual

# Class 1: calculating & recording earnings, NICs & NIC rebates: rates, limits, thresholds, rebates and P11 completion: 2003/04 completion of forms P11 (2003-04) & P14 (2003-04) example 9 - contracted-out salary related (COSR) scheme -

• Lower Earnings Limit (LEL): £77.00
• Earnings (ET): £89.00
• Upper Earnings Limit (UEL): £595.00

## Weekly earnings of £90.00

 £90.00 - £89.00 = £1.00 Employee’s NICs due = £1.00 x 9.4% = £0.094, rounded to £0.09 £89.00 - £77.00 = £12.00 Employee’s NIC rebate due = £12.00 x 1.6% = £0.192, rounded to £0.19 Net employee’s NICs due = £0.09 - £0.19 = £0.00 Balance of employee’s NIC rebate available to the employer = £0.10 Employer’s NICs due = £1.00 x 9.3% = £0.093, rounded to £0.09 Employer’s NIC rebate due = £12.00 x 3.5% = £0.42+ £0.10 balance of employee’s NIC rebate = £0.52 Net employer’s NICs due = £0.09 - £0.52 = -£0.43 Total NICs due = £0.00 + -£0.43 = -£0.43

Note

Where the employee’s NICs due are less than the value of the employee’s NIC rebate due, only the value of the employee’s NIC rebate equivalent to that of the employee’s NICs due is paid to the employee. This, in effect, will reduce the employee’s NICs to NIL. Any balance of the employee’s NIC rebate is available to the employer.

Complete P11 as follows -

 1a 1b 1c 1d 1e £77 £12 £1 R £0.43 £0.00

Assuming earnings are the same for 52 weeks, complete P14 as follows -

 1a 1b 1c 1d 1e £4004 £624 £52 R £22.36 £0.00