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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: 2003/04: completion of forms P11 (2003-04) & P14 (2003-04) example 10 - 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 £100.00

£100.00 - £89.00 = £11.00      
         
Employee’s NICs due = £11.00 x 9.4% = £1.034, rounded to £1.03  
£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 = £1.03 - £0.19 = £0.84  
Employer’s NICs due = £11.00 x 9.3% = £1.023, rounded to £1.02  
Employer’s NIC rebate due = £12.00 x 3.5% = £0.42  
Net employer’s NICs due = £1.02 - £0.42 = £0.60  
Total NICs due = £0.84 + £0.60 = £1.44  

Complete P11 as follows -

1a 1b 1c 1d 1e
         
£77 £12 £11 £1.44 £0.84
         

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

1a 1b 1c 1d 1e
         
£4004 £624 £572 £74.88 £43.68