National insurance in a bonus month

onlyroz

I'm trying to figure out how much National Insurance I should be paying in a bonus month. My taxable pay after salary sacrifice deductions is £37630 and my personal allowance is £6650, and so I think that I *just* fall into the basic rate tax band.

In February I get a bonus and my taxable pay goes up from its normal amount of £2885 to £5885. Am I correct in thinking that the National Insurance in a bonus month is taxed as if I am a higher rate tax payer? I.e. I pay 12% on everything between £596 and £3188, and then 2% on everything above £3188.

jimmo

Pretty much right but its nothing to do with whether you are a higher rate taxpayer.
Income Tax has an annual basis but PAYE throws up all sorts of inconsistencies, particularly when bonuses are paid early in a tax year.
National Insurance is purely based on pay periods. So when you are paid your bonus the NI will be based on your pay for the month.
I can’t find a monthly NI table to check your figures but I would guess that a small part of your bonus will suffer 12% NI but the rest will be at 2%. HMRC only give weekly figures.
http://www.hmrc.gov.uk/rates/nic.htm

onlyroz

OK thanks. It took me about 10 goes but I finally was able to get my calculations for tax and NI to match those on my payslip. I was thrown because the various online take-home pay calculators seem to calculate NI on an annual basis and came up with a bonus payment of around £200 less than I actually received.