Class 1: Calculating Class 1 NICs for Directors: Annual earnings period: Examples: Regular monthly salary
Regulation 8 SSCR 2001
Director paid £3000 on 28th of each month starting April 1999. Cumulative NICs areshown but amount actually payable each month is difference between amount due and amountpreviously paid. The NICs amounts are also rounded down for ease of presentation.
|28 April||£3000||Nil||Nil||Below LEL and Thresholds|
|28 May||£6000||£256 (6000 - 3432 @ 10%)||£203 (6000 - 4355 @ 12.2%)||Earnings exceed both LEL and EET|
|July to November||£12000 - £24000||Calculations as before||Calculations as before||Calculations as before|
|28 December||£27000||£2256 (26000 3432 @ 10%)||£2765 (27000 4335 @ 12.2%)||Primary NICs restricted to earnings up to UEL*|
|No restriction on secondary|
|January/ February||£33000||£2256||Calculation as before|
|28 March||£36000||£2256||£3863 (36000 4335 @ 12.2%)|
If the employer decides to pay on account (NIM12026)Class 1 NICs are due from the first month and the employer adjusts the final payment atthe end of the year to ensure the same amount of NICs is paid as in the example.
- The above example is for a tax year prior to 6 4 2003. From 6 4 2003, a new primaryliability was introduced on all earnings above the Upper Earnings Limit. This should betaken into account when applying the example to tax years 2003/2004 onwards. Full guidanceon the new primary liability on earnings above the Upper Earnings Limit is provided at NIM01100.