NIM01117 - Class 1 Structural Overview from 6 April 2003: Assessing primary Class 1 NICs from April 2003: Example: Earnings are occasionally above the Upper Earnings Limit

Mr A Adams is an employee in a non contracted-out employment with earnings of 拢3,000 per month. He is employed for the whole of the 2003 to 2004 tax year.

In April 2003 the following primary Class 1 NICs will be due:

Earnings on which the main primary percentage is payable:

  • 拢2,579 (monthly UEL) less 拢385 (monthly PT) = 拢2,194
  • 拢2,194 x 11% (main primary percentage) = 拢241.34

Earnings on which the additional primary percentage is payable:

  • 拢3,000 (total earnings) less 拢2,579 (monthly UEL) = 拢421
  • 拢421 x 1% (additional primary percentage) = 拢4.21

Total primary payable for April 2003 = 拢245.55 (that is 拢241.34 + 拢4.21)

As Mr Adams remains employed for the whole of the 2003 to 2004 tax year with the same employer, the following primary Class 1 NICs will be due:

  • 拢245.55 x 12 monthly deductions = 拢2,946.60

For the 2003 to 2004, Mr Adams will have paid:

  • main primary NICs amounting to 拢2,896.08
  • additional primary NICs amounting of 拢50.52

See NIM01116 for general information relating to this example.