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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 16- contracted-out money purchase (comp) scheme -

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

Weekly earnings of £650.00

 £595.00 - £89.00 = £506.00 Employee’s NICs due up to UEL = £506.00 x 9.4% = £47.564, rounded to £47.56 £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 up to UEL = £47.56 - £0.19 = £47.37 £650.00 - £595.00 = £55.00 Employee’s NICs due on earnings above UEL = £55.00 x 1% = £0.55 Total employee’s NICs due = £47.37 + £0.55 = £47.92 Employer’s NICs due up to UEL = £506.00 x 11.8% = £59.708, rounded to £59.71 Employer’s NIC rebate due = £12.00 x 1% = £0.12 Net employer’s NICs due up to UEL = £59.71 - £0.12 = £59.59 Employer’s NICs due on earnings above UEL = £55.00 x 12.8% = £7.04 Total employer’s NICs due = £59.59 + £7.04 = £66.63 Total NICs due = £47.92 + £66.63 = £114.55

Complete P11 as follows -

 1a 1b 1c 1d 1e £77 £12 £506 £114.55 £47.92

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

 1a 1b 1c 1d 1e £4004 £624 £26,312 £5,956.60 £2,491.84

employee’s NIC rebate in addition to the employer’s NIC rebate due. The entry in