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• # 83759
• Thu 05 Jul 2012 05:00 PM

Hi people, I just started on my Payroll Management Diploma last week and I must mention how hooked I am with the course already. I am loving it.


However there is this only one calculation which I have failed to work out after numerous attempts.

There is an example on page 5 on the hmrc website booklet CA44 on this link: http://www.hmrc.gov.uk/nitables/ca44.pdf 
On this example Mr Morris was paid £10,000 bonus on month 3 but I don't understand how the calculations came to £501.12 for the directors NIC. According to my calculations this is very different, however, on month 3 the companys NIC is calculated rightly.


So I was wondering if that is a typo on HMRC (which is highly unlikely) or is there an alternative calculation involved in this situation.


I would really appreaciate if someone would assist me on this.


Have a good day :)       

• Naz
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• # 84263
• Thu 26 Jul 2012 01:24 PM

Hi Naz
Not sure how you are working this out but I have just put the earnings of £11160 through my Sage software and I get the same as HMRC of £501.12.
(So at least I know my software is OK)
Kevin

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• # 84454
• Sun 05 Aug 2012 09:19 PM

Hi there,

Probably a bit late....but if you download the NI tables A & J (CA38) it will show you on Page 66 how to work out the Director's NI of £501.12 you are talking about.

You take the monthly figure of £11,160 and subtract the UEL of £3540 (using the monthly chart) which leaves £7620.  Then using the Additional pay tables on Page 66 you work out the additional NI due, which is £140 on £7000, £12 on £600 and .40 on £20.  Add these together and you get £152.40 and then you add the amount of NI due on earnings above the UEL which is £348.72.

So £152.40 plus £348.72 = £501.12

Hope this helps....very complicated!

Pauline 

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