Always
Note 1 SMP can be topped up by wages. In this event it will
be necessary to lift and disregard the SMP element. An adjustment
to the tax and NI (if these are paid) on the gross pay will also be
necessary if the tax and NI were also paid against the SMP. If the
employer can not provide adjusted figures the decision maker can
apply the following formula:
1) Identify the amount to be lifted, and divide it by the
total amount of taxable and NI-able pay. Multiply the result by 100
to get a percentage figure
Multiply the total tax figure by the percentage calculated. The result is the amount of tax paid on the lifted amount. Repeat the process for the NI figure
Deduct the amounts calculated in 2. From the total tax and NI paid. The difference is the amount of tax and NI paid on the gross pay, minus the amount lifted
Example
Details on wage slip:
| Basic Pay | £120.00 |
| SMP | £39.00 |
| Tax | £16.40 |
| NI | £11.50 |
In this example SMP has been paid which is taxable and NI-able.
As SMP is not treated as earnings it should be lifted and the tax
and NI adjusted. The employer was first asked for the revised tax
and NI figures however, since these details could not be provided
the formula above is applied:
1) Amount to be lifted is £39.00, divided by the total
taxable and NI-able pay of £159.00
£39.00 x 100 = £24.528301
£159.00
2) Multiply the tax amount by the percentage calculated
£16.40 x 24.528301% = £4.0226413
= £4.02 (rounded down)
Multiply the NI amount by the percentage calculated
£11.50 x 24.528301% = £2.8207546
= £2.82 (rounded down)
3) Deduct the figures in 2 from the total tax and NI paid
Tax: £16.40 - £4.20 = £12.38
NI: £11.50 - £2.82 = £6.68
4) The figures in
3 represent the amount of tax and NI paid on the gross pay
of £120.00
Note 2 If a person has been sick for more than thirteen
weeks (DPTC) or four weeks (WFTC), and has been back at work for
less than the assessment period (WFTC) or less than nine weeks
(DPTC), the guidance in DMG 23160 et seq applies
