All examples on this page use the 2000/2001 rates and
earnings bands. NICs are worked out using the exact percentage
method and are based on the employee being a member of a
Contracted-Out Salary Related (COSR) scheme.
When calculating NICs, priority is given to the
contracted-out earnings. NICs are worked out on the total earnings
using the shortest earnings period of the contracted-out
employment(s).
Employee’s NICs are worked out at the appropriate not
contracted-out percentage rate on not contracted-out earnings above
the EE/ET up to and including the UEL. Employer’s NICs are
worked out at the appropriate not contracted-out percentage rate on
the total earnings above the ER/ET.
EXAMPLE
K. Roberts earns £560 per week from his not
contracted-out job and £80 per week from his contracted-out
job. Total earnings are £640 per week and the earnings period
is weekly.
Employee’s NICs due: £45.90 (Table letter A)
Employer’s NICs due: £67.83 (Table letter A)
Recording the NICs due on form P11
NICs will be recorded on one form P11 under contribution
Table letter A and the end of year totals, again under contribution
Table letter A, on one form P14. The entries on the P11 will be as
follows:-
| National Insurance contributions Note: LEL = Lower Earnings Limit, UEL = Upper Earnings Limit | |||||||||||
| Earnings details | Contribution details | Rebate details | |||||||||
| Earnings at the LEL (where earnings reach or exceed the LEL) | Earnings above the LEL, up to and including the employee’s Earnings Threshold | Earnings
above the employee’s Earnings Threshold, up to and including
the employer’s Earnings Threshold
| Earnings above the employer’s Earnings Threshold, up to and including the UEL | Total of employee’s and employer’s contributions payable | Employee’s contributions payable | NIC rebate due on amount in column 1b | NIC rebate due on the sum of the amounts in columns 1b and 1c | ||||
| 1a | 1b | 1c | 1d | 1e | 1f | 1g | 1h | ||||
| 67 | 9 | 8 | 451 | 113 | 73 | 45 | 90 | ||||
Recording the end of year totals on form P14
(The entries below assume the level of earnings remained
unchanged throughout the year)
| National Insurance contributions in this employment (Note: LEL = Lower Earnings Limit, UEL = Upper Earnings Limit) | ||||||||||
| NIC Table letter | Earnings at the LEL
(where earnings reach or exceed the LEL)
(whole £s only) | Earnings
above the LEL, up to and incl. The employee’s Earnings
Threshold
(whole £s only) | Earnings above the
employee’s Earnings Threshold, up to and incl. The
employer’s Earnings Threshold
(whole £s only) | Earnings
above the employer’s Earnings Threshold, up to and incl. The
UEL
(whole £s only) | Total of employee’s and employer’s contributions | Employee’s contributions payable | ||||
| 1a | 1b | 1c | 1d | 1e | 1f | |||||
| A | 3,484 | 468 | 416 | 23,452 | 5,913 | 96 | 2,386 | 80 | ||
| 1g/1h | 1I | 1j | ||||||||
| £ | p | £ | p | £ | p | |||||
| NIC rebate due | Statutory Sick Pay | Statutory Maternity Pay | ||||||||
