NIM01222 - Class 1 structural overview from 6 April 2009: assessing primary Class 1 NICs from 6 April 2009: example: earnings are consistently above the Upper Earnings Limit - not contracted out
Mr Braddock is an employee with earnings of 拢5,000 per month. He is employed for the whole of the 2020-2021 tax year.
In April 2020 the following primary Class 1 NICs will be due:
Earnings on which the main primary percentage is payable:
拢4167 (monthly UEL) less 拢792 (monthly PT) = 拢3,375
拢3,375 x 12% (main primary percentage) = 拢405.00
Earnings on which the additional primary percentage is payable:
拢5000 (total earnings) less 拢4167 (monthly UEL) = 拢833.00
拢833 x 2% (additional primary percentage) = 拢16.66
Total primary payable for April 2020 = 拢421.66 (that is 拢405.00 + 拢16.66)
As Mr Braddock remains employed for the whole of the 2020-2021 tax year with the same employer, the following primary Class 1 NICs will be due:
拢421.66 x 12 monthly deductions = 拢5059.92
For the 2020-2021 tax year, Mr Braddock will have paid:
- main primary NICs amounting to 拢4860.00
- additional primary NICs amounting to 拢199.92
See NIM01221 for general information relating to this example.