National Insurance due from student on placement year

shopndrop

My son is on a placement year, started beginning July, and won't get paid until end of August. He is trying to work out what he will be taking home. He is not paid by the company he is working for but another company is dealing with all admin and pay and he has been told he will be treated as a contractor for pay. He has been told by another student that they think he will be liable for employee and employer contributions and could end up paying 11% + about 12%. Can anyone tell me if this is correct or how he can find out what he will be paying.

Gem_

If he is being treated like a contractor as (opposed to self employed) then assume it will work the same as an 'normal' job for tax and national insurance purposes ie. if he earns over if above £97 a week (the 'earnings threshold') and up to £645 per week you pay 11 per cent.

Tax he will pay 0 up to £5,035 then 10% up to the next £2,151 and then 22% on the rest (unless he has a really really good placement and gets to the higher rate )

I cannot fathom any reason why he would need to pay employer contributions as he isnt an employer - probably want to ignore financial advice from that student ...

AKAIK anyway

HTH

G

shopndrop

He has been told he is being treated as contractor definitely not self employed. He will definitely not earn enough (if only) to pay higher rate tax. The reason he is querying is that another student also on placement has just got his first pay and he has 2 lots of NI deducted and total deductions for tax and NI amount to about 38% of his gross pay! A considerable amount more than he expected.

DrFluffy

I think it depends. Where I work, contractors are self-employed, and resposible for their own tax and NI comtributions as they are their own employer.

This site might have something on that will be of use: http://www.contractorumbrella.com/

shopndrop

The calculator on this site is most useful. Thanks.

rachelcat18

I am doing a placement year as part of my university course, and i have to pay NI

shopndrop

My son expected to pay NI and tax, but it has come as a surprise that he is paying both employee and employer contributions.

ceminem

the employer pays for the employers NIC not the employee

shopndrop

As you will see from my 1st post, my son is being treated as a contractor and as such will be liable for both.