Posted: Wed Dec 12, 2007 6:38 pm Post subject: NI Calculation for New Starters
Hello
I have another question that I would like some help with please as I cannot think straight anymore!
I am having a disagreement with my system providers and would like to know the correct procedure for calculating NI on a starter.
An Employee started in mid-September, but was not paid until the October payrun.
How should the NI calculate?
Should the system calculate the NI on the October amount, and use the additional gross tables for the September amount?
OR Should the system treat them as 2 seperate periods completely and calculate both amounts seperately using the normal NI tables?
Any advice will be gratefully received!!
I seem to be going round and round in circles with my provider.
Posted: Thu Dec 13, 2007 10:13 am Post subject: NICs calculation for new starters
The NICs on the pay for each month should be calculated separately. The procedure is clearly set out, with examples, in booklet CWG2, on pages 36 and 37.
Example
A new employee starts work on 11 June and is due to be paid monthly on the last day of each month. The earnings period is monthly and the first pay day is 31 July. The employee receives £2,250 gross pay which is made up of
£750 for the period 11 June – 30 June
£1,500 for the period 1 July – 31 July.
Work out NICs separately on the payment:
for June of £750 and record NICs on the employee’s form P11 in tax month 3
for July of £1500 and record NICs on the employee’s form P11 in tax month 4.
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