ESM8235 - BAsic principles: how to work out the deemed payment: step eight - example using step by step guide
Ms G is a worker whose service company has earned income from a relevant engagement. The service company paid her a salary of 拢3,000 during the year. The amount at Step Seven is 拢30,000. This produces the following figures:
- |
Amount |
|---|---|
Earnings to date |
拢3,000 |
The amount at Step Seven |
拢30,000 |
The secondary Class 1 NICs threshold |
拢5,000 |
The secondary Class 1 NICs percentage rate |
0.15% |
Using the template at ESM8230聽the calculation is as follows:
What to do |
Box number聽 |
Amount |
|---|---|---|
Enter in this box the earnings to date |
1 |
3000 |
Enter in this box the amount at Step Seven |
2 |
30000 |
Enter in this box the secondary Class 1 NICs earnings threshold |
3 |
5000 |
Enter in this box the secondary Class 1 NICs percentage rate |
4 |
0.15% |
Deduct the figure in box 1 from the figure in box 3 and enter the result in this box |
5 |
2000 |
Deduct the figure in box 5 from the figure in box 2 and enter the result in this box |
6 |
28000 |
Multiply the figure in box 6 by 100 and enter the result in this box |
7 |
2800000 |
Add 100 to the figure in box 4 and enter the result in this box |
8 |
115 |
Divide the figure in box 7 by the figure in box 8 and enter the result in this box |
9 |
24348 |
Add the figure in box 9 to the figure in box 5 and enter the result in this box (a) |
10 |
26348 |
Deduct the figure in box 10 from the amount at box 2 (b) |
11 |
3652 |
(a) this is the amount of the deemed payment - 拢26,348
(b) this is the amount of secondary Class 1 NICs due on the deemed payment - 拢3,652
Note - 2025-26 NICs rates used in example calculation.