Income for National Insurance?

Prism

hamptons wrote: »

Prism

Useful to know.I see why business owners pay themselves maximum. But if the company cannot afford to pay the maximum, I would still get a Qualifying Year if they can pay me at least the minimum £6136?

Yes thats right

hamptons

Thank you. Very clear now.

Marcon

hamptons wrote: »

Also what does it mean if you earn between £118 and £166 a week (2019 to 2020) from one employer you may still be building up your National Insurance record? If your emplyment income is in that range what is required to know you are getting Qualifying Years for State Pension?

The 'may' relates to how your earnings are paid over the year.

A ‘qualifying year’ sounds as though you might need to have a perfect 52 weeks of working for it to count. In fact, any tax year where you receive a minimum amount of earnings, or Class 1 or Class 3 ‘credits’ (which you receive for example, if you are claiming child benefit for child under the age of 12) can be a qualifying year. There are many different ways to qualify for either Class 1 or Class 3 NIC credits. See GOV.UK for a full list.

The 2018/19 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £116 (the LEL) – total £6,032. Any pay periods in which you have earned under the LEL will not count towards the total, so for example if you earn £187.50 a week for 26 weeks of the year, but only £90 a week for the other 26 weeks of the year then although your earnings in total will exceed the £6,032 amount, you will not have a qualifying year as your earnings in weeks where you exceed the LEL only reach £4,875.

Source: https://www.litrg.org.uk/latest-news/news/180723-any-questions-i%E2%80%99m-not-paying-national-insurance-either-my-holiday-jobs-%E2%80%93-how

hamptons

Marcon wrote: »

The 'may' relates to how your earnings are paid over the year.

A ‘qualifying year’ sounds as though you might need to have a perfect 52 weeks of working for it to count. In fact, any tax year where you receive a minimum amount of earnings, or Class 1 or Class 3 ‘credits’ (which you receive for example, if you are claiming child benefit for child under the age of 12) can be a qualifying year. There are many different ways to qualify for either Class 1 or Class 3 NIC credits. See GOV.UK for a full list.

The 2018/19 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £116 (the LEL) – total £6,032. Any pay periods in which you have earned under the LEL will not count towards the total, so for example if you earn £187.50 a week for 26 weeks of the year, but only £90 a week for the other 26 weeks of the year then although your earnings in total will exceed the £6,032 amount, you will not have a qualifying year as your earnings in weeks where you exceed the LEL only reach £4,875.

Source: https://www.litrg.org.uk/latest-news/news/180723-any-questions-i%E2%80%99m-not-paying-national-insurance-either-my-holiday-jobs-%E2%80%93-how

Thank you for highlighting this.

So earning between £6136 - £8632 a year is not enough to ensure a Qualifying Year for State Pension?

To be a Qualifying Year, the income also has to be paid at the rate of either £118 or more per week or at least £511.34 per month. Any week or month where the pay is lower does not count towards your annual income total (for the purposes of Qualifying Years).

Does the same happen if the weekly or monthly pay exceeds the pro rata weekly or monthly upper limit £8632 (£166 pw or £719.34 pm) - would they be excluded?

Would earning £7,000 for a 3 month project and being paid as £2333.33 monthly produce a Qualifying Year (if there was no other employment during the year)?