National Insurance help

Jami74

I think I've overpaid NI.

I've put my details into this calculator

https://www.which.co.uk/money/tax/tax-calculators/national-insurance-calculator-aw6yt3g6vd0g

And it suggests that on a gross pay of £25,000 I should have paid £1,964, but looking at my tax account online I've actually paid close to £3k of NI.

I called Payroll who at first said that as it was the end of the tax year I'd have to contact HMRC. I pointed out that the website says that my employer should be able to refund it and only contact them if they can't with the reason why. So then I was told that they would look into it but they very much doubt I have paid too much NI as their system calculates it automatically. I was asked if I knew when exactly I think I overpaid, but I don't, I just added up the total for the year.

I'm wondering if I am misunderstanding how NI payments work. Could I have paid so much because I have had 3 different jobs (with the same employer) over the year? Or because my salary has varied from week to week? I felt like a bit of a fool questioning it.

molerat

NI is calculated and payable per pay packet unlike tax which is calculated over the year. Large and small payments can lead to an incorrectly perceived overpayment over the year. You need to check each pay slip.

Jami74

molerat wrote: »

NI is calculated and payable per pay packet unlike tax which is calculated over the year. Large and small payments can lead to an incorrectly perceived overpayment over the year. You need to check each pay slip.

Okay, so as my pay has varied so much from payslip to payslip then that would explain why I've paid so much and it's probably not a mistake?

Is NI deducted from total pay rather than taxable pay? (I think my pension is deducted before tax)

agrinnall

[STRIKE]NI is calculated on taxable pay (gross pay minus deductions such as pension contributions).[/STRIKE] It appears I was wrong about that. You can calculate whether each payslip's deductions are correct by referring to the current NI contribution rates:


https://www.gov.uk/national-insurance-rates-letters

Jami74

agrinnall wrote: »

NI is calculated on taxable pay (gross pay minus deductions such as pension contributions). You can calculate whether each payslip's deductions are correct by referring to the current NI contribution rates:


https://www.gov.uk/national-insurance-rates-letters

Thank-you.

I have gone through every single payslip.

My newest role has had NI deducted as though it is weekly pay although I am actually paid monthly, and have been assured by Payroll that it is supposed to be monthly. That accounts for nearly £300 over payment.

For nearly all my other payslips the totals are correct IF I do the calculations for NI deductions from total pay. If they are supposed to be deducting NI from taxable pay then I have overpaid by a small amount on every single weekly payslip.

There are a couple of weekly payslips where I was paid for more than one week (due to time sheet submissions) which tips me into the higher rate of NI, I suppose those ones can't be helped.

Asghar

Someone can earn £500 per month for 12 months, a total of £6000 and pay no NI as each payslip is below the threshold.

Someone else can work for just one month in the tax year, get paid £6000 and end up paying NI of over £400.

molerat

NI is deducted from total gross pay and not the post pension amount. A decent payroll should be able to adjust the NI allowance for odd pay periods but many can't be bothered to do it correctly, falls into the too difficult category.

00ec25

agrinnall wrote: »

NI is calculated on taxable pay (gross pay minus deductions such as pension contributions).

no, NI is on gross

chrisbur

Jami74 wrote: »

Thank-you.

I have gone through every single payslip.

My newest role has had NI deducted as though it is weekly pay although I am actually paid monthly, and have been assured by Payroll that it is supposed to be monthly. That accounts for nearly £300 over payment.

For nearly all my other payslips the totals are correct IF I do the calculations for NI deductions from total pay. If they are supposed to be deducting NI from taxable pay then I have overpaid by a small amount on every single weekly payslip.

There are a couple of weekly payslips where I was paid for more than one week (due to time sheet submissions) which tips me into the higher rate of NI, I suppose those ones can't be helped.

Do you mean that you get paid once a month but your employer is processing this as if it was a weekly wage and only giving you the benefit of the weekly NI allowance. This is completely wrong.

NI is calculated on total pay if your payslip shows two figures a total pay and taxable pay; it is only if you have a salary sacrifice pension that you would pay NI after deduction of the pension figure.

Regarding having two payments together due to "time sheet submissions" There is no higher rate fir NI I assume what has happened is that you were paid as if these were one week's wages getting only one NI allowance. This is wrong the pay should have had NI calculated as if it was two separate weeks. Section 3.2 of the following covers this....
https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2017-to-2018-employer-further-guide-to-paye-and-nics#sec2

Jami74

Asghar wrote: »

Someone can earn £500 per month for 12 months, a total of £6000 and pay no NI as each payslip is below the threshold.

Someone else can work for just one month in the tax year, get paid £6000 and end up paying NI of over £400.

Goodness! I'm really going to have to think about how I work over the next financial year then. And whether it is worth me having a part time substantive post and adding bank hours rather than increasing my substantive hours. It seems my erratic earnings have cost me about £1000 to NI.

molerat wrote: »

NI is deducted from total gross pay and not the post pension amount. A decent payroll should be able to adjust the NI allowance for odd pay periods but many can't be bothered to do it correctly, falls into the too difficult category.

Yeah, one payslip is for 90 hours. Clearly I did not work 90 hours in one week. I hadn't realised at the time that NI was not worked out like tax so would not balance itself out at some point.

chrisbur wrote: »

Do you mean that you get paid once a month but your employer is processing this as if it was a weekly wage and only giving you the benefit of the weekly NI allowance. This is completely wrong.

Yes. It says weekly on both the electronic staff records and my paper payslips but on two occasions I queried it (because I wasn't receiving the money) and both times I was told it is a monthly assignment. So I have had two payslips one month apart for a months salary and paid lots of NI and student loan on them (total deductions including emergency tax = 49%)

chrisbur wrote: »

NI is calculated on total pay if your payslip shows two figures a total pay and taxable pay; it is only if you have a salary sacrifice pension that you would pay NI after deduction of the pension figure.

I'm not aware I have a salary sacrifice scheme, so the calculations on total pay is correct then.

chrisbur wrote: »

Regarding having two payments together due to "time sheet submissions" There is no higher rate for NI I assume what has happened is that you were paid as if these were one week's wages getting only one NI allowance. This is wrong the pay should have had NI calculated as if it was two separate weeks. Section 3.2 of the following covers this....
https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2017-to-2018-employer-further-guide-to-paye-and-nics#sec2

Yes, although I suspect that this won't happen on historic pay now and the way payroll have mucked up my pay so far over the last year (still waiting for some pay from December) I am just grateful to be receiving anything.

Thank-you everyone for your comments. I am understanding things a lot better now.

chrisbur

Cannot comment on the exact details but from what you have said you appear to have over paid NI.
As your employer has suggested contacting HMRC then at tax year end I would be inclined to do that.
Send copies copies of payslips and explain that you were processed as if each was your weekly wage but on some (list those it applies to) you were actually paid a month's wage or two week's or whatever applies. Hopefully your payslips will have gross to date figures so they will be able to see that no payslips are missing.

I have not had any experience of anyone doing this in the past so cannot say if you will be successful. If you do try this I would be grateful if you could put on here if it was successful or not.