N.I. question

DomTom

i received the letter from HM Revenue telling me how much i earnt and how much tax and NI i paid. I checked it up again a tax calculator and i had questions.

tax i paid and the tax according to calculator match up, but the NI doesnt

i earnt £14k from july09-april10, is it right that i paid around £1100 in NI? the tax calculator for earnings of 14k per year was £900 in NI

bryanb

Who are H&M?

DomTom

ha erm i meant HM revenue

CLAPTON

calculators tend only to give the correct answers if you are earning the same income for 12 months of the tax year.

for tax it doesn't matter but for NI is does as NI depends upon your weekly or monthly income and not your income for the whole year.

CLAPTON

so if you earn 14k over 52 weeks then you would pay approx

weekly income = 14,000/52 = 269
NI allowance is 110 per week
so NI payments would be (269-110) = 159 x 11% = 17.51 so for the full year
you pay 17.51 x 52 = 910

however
if you earn 14,000 over 9 months then
per week you earn 14000 x 36/52 = 388 per week
NI allowance is 110 so NI is (388-110) x 11% = 30.7 per week
so per annum you pay about 30.7 x 36 = 1,104


that's how it is.

DomTom

spot on, thanks for the detail too now i have a clearer idea of how it works!