National Insurance - 2 jobs

Jonah01

Hi,

I was wondering if some could clarify the rules regarding employee and employer national insurance when someone has two jobs.

My wife currently earns under the NI threshold and is looking to start a second job which will also be under the threshold. Does she not pay NI on both jobs or does one of the employers need to total up her earnings and work out the NI?

Also from the point of view of the second employer. When do they start paying employer NI for my wife? Do they base it on the total of the jobs are do they pay no employer NI because they are treated individually.

I'm finding varying answers.

Thanks for any help.

purdyoaten

Jonah01 wrote: »

Hi,

I was wondering if some could clarify the rules regarding employee and employer national insurance when someone has two jobs.

My wife currently earns under the NI threshold and is looking to start a second job which will also be under the threshold. Does she not pay NI on both jobs or does one of the employers need to total up her earnings and work out the NI?

Also from the point of view of the second employer. When do they start paying employer NI for my wife? Do they base it on the total of the jobs are do they pay no employer NI because they are treated individually.

I'm finding varying answers.

Thanks for any help.

The two jobs are not 'added together' - unless they are somehow linked. Your wife would have to earn £155 per week at each job in order to pay NIC at each. Earnings of £112 at EITHER would qualify her for state benefits even though no NIC is paid.

For employers the threshold is £1 more at £156, again at each.

Jonah01

Thank you for such a quick reply.

I think both earnings would be just below the £112 but we have our child benefit in her name so am I correct in thinking this qualifies her for state benefits instead?

purdyoaten

Benefits are not my thing! The other factor is tax!

When the second job is up and running your wife should arrange for her tax free allowance of £10600 to be split between the jobs. Otherwise, she will pay no tax on her current job and 20% on ALL of her earnings from the second job which, obviously, would be incorrect.

For example: job 1 £112 p.w. or £5824 per annum. Allowances required £5824 - balance (10600 - 5824) 4776.

Ask HMRC to issue code 582L at first job, 477T at second job.

Savvy_Sue

Jonah01 wrote: »

but we have our child benefit in her name so am I correct in thinking this qualifies her for state benefits instead?

Define 'state benefits' and give the ages of your children ...

Child Benefit for a child under 12 gives your wife class 3 National Insurance Credits, which are valid for state pension and bereavement benefits only. Take a look here.

(And I have learned something, because in my day it was called Home Responsibilities Protection ...)

Jonah01

Sorry yes I meant state pension. Children are aged 2 and 5. So thats good her national insurance credits shouldn't have any gaps. Thanks.

purdyoaten when you say up and running do you mean contact HMRC before her first pay packet?

Thanks

purdyoaten

Jonah01 wrote: »

purdyoaten when you say up and running do you mean contact HMRC before her first pay packet?

Thanks

You said in your first post that your wife 'is looking to start a second job' and I presume that this is still the case.

There is no point in contacting HMRC until after her first payment as they will not be informed of the new job until that time under the new real-time system.

Jonah01

Hi,

Sorry for the late reply.

I am really trying to avoid my wife being over taxed on the first payment as this will be a larger payment than normal.

Is there anyway to preempt this so HMRC can allocate part of her tax free allowance to this job before hand?

Cheers

purdyoaten

Jonah01 wrote: »

Hi,

Sorry for the late reply.

I am really trying to avoid my wife being over taxed on the first payment as this will be a larger payment than normal.

Is there anyway to preempt this so HMRC can allocate part of her tax free allowance to this job before hand?

Cheers

I doubt it. Under RTI (Real Time information) notifications of starters, leavers and salary details are sent together in a 'payment submission'. To my mind HMRC could not be aware of the second job until then.

Clearly 'Real Time' would not appear to work in your circumstances!

Jonah01

Would the initial tax code used be the full tax free one i.e. 1060 or would it be made without any tax code and therefor all taxed at 20%.

Cheers

Savvy_Sue

Jonah01 wrote: »

I am really trying to avoid my wife being over taxed on the first payment as this will be a larger payment than normal.

Is there anyway to preempt this so HMRC can allocate part of her tax free allowance to this job before hand?

I don't think so: but remember, she'll get the tax back over the following weeks or months once she has got HMRC to split the tax code as already described.