Your workforce may include people of all ages from school leavers to those past state pension age, with some working part time or holding down two jobs concurrently.
The National Insurance Contributions (NICs) payable differ, so it is important to get the calculations right.
Employers’ NICs are not due on the wages of those aged under 21, or apprentices aged under 25, for wages up to £4,167 per month. However, employees’ NICs are due if their pay exceeds £719 per month.
Those over state pension age do not pay employees’ NICs on any of their wages, but employers’ NICs must still be paid. State pension age is gradually increasing for both men and women, so the exact date a person achieves state pension age will vary according to the individual’s date of birth. Check your payroll software records for the date on which an employee will reach state pension age to ensure they do not overpay NICs.
An employee who holds two jobs may pay the maximum employees’ NICs on their higher paid employment, in which case they should not pay NICs on their second job. Such individuals should apply for a deferral of NICs on their second employment as early in the tax year as possible.
Directors can determine their own pattern of pay and may receive a bonus if the company’s results are good. To ensure they pay the right amount of NICs for the tax year the directors should be treated as having an annual pay period for NICs purposes.
Would you like help and advice on this or any other issue?
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This note was published from our Summer 2019 Tax Briefing dated June 2019
Please be aware that the information above may have changed in subsequent months.
This note is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or for taking professional advice.