Real time PAYE question

chrismac1

Re. NI saving, let's consider someone working in a pub with fluctuating weekly hours and paid holiday pay. Normal weekly gross pay is £225. In 2012-13 that is £11.18 NI.

But consider what happens here - the Lake District - in July, August and December when the cash tills are going nuts. Some weeks that gross pay will be £300 for £21.53 of NI, in Christmas season you'll typically get :

225, 300, 300, 225 (holiday pay) for £63 of NI.

Now put that person on monthly pay, that's 1,050 gross for December for just £50 of NI. And that is not even an extreme case of fluctuating pay, I have many staff on client books with periods with very little pay then a few periods of lots of pay - cover staff, daughters and sons who are at college, and so on.

Monthly pay can save some of these people over £50 in NI per year.

chrisbur

chrismac1 wrote: »

Re. NI saving, let's consider someone working in a pub with fluctuating weekly hours and paid holiday pay. Normal weekly gross pay is £225. In 2012-13 that is £11.18 NI.

But consider what happens here - the Lake District - in July, August and December when the cash tills are going nuts. Some weeks that gross pay will be £300 for £21.53 of NI, in Christmas season you'll typically get :

225, 300, 300, 225 (holiday pay) for £63 of NI.

Now put that person on monthly pay, that's 1,050 gross for December for just £50 of NI. And that is not even an extreme case of fluctuating pay, I have many staff on client books with periods with very little pay then a few periods of lots of pay - cover staff, daughters and sons who are at college, and so on.

Monthly pay can save some of these people over £50 in NI per year.

I agree that the NI for a monthly wage of 1050.00 would be very close to £50 but I make the NI for weekly of 225.00 as £9.48 and for 300.00 as £18.48 which would give a total of £55.92.

Also you are assuming that four weeks wages equals one months wages but you get thirtenn (strictly a little over thirteen) four week periods in a year. Hence the 5 or 6 pound differance above.

EDIT The only time I can see a fluctuation would benefit the employee would be when say one or two of the weekly wages fell below the weekly earnings threshold but the monthly equivalent was above the monthly earnings threshold. But this is not likely to be a very regular thing for most employees.