National insurance on redundancy pay

unkle

How is national insurance calculated in relation to the amount above £30k? I.E. in relation to the upper and lower weekly limit.

daveyjp

No NIC on redundancy payments.

https://www.gov.uk/staff-redundant/redundancy-pay

unkle

Thanks, and what about on PILON, other benefits etc? NI is payable, just can't quite work out the rate as it's paid as one lump sum.

sharpe106

National insurance would need to be paid on PILON, what other benefits?

https://brodies.com/insights/employment-and-immigration/how-should-payments-in-lieu-of-notice-be-taxed-from-april-2018/

unkle

I know it is taxable, but how is it calculated.
NI Is payable at 12% between £792.01 a month and £4,167 and then 2% above that
if in the month my pay has already exceeded that figure, do I only pay 2% NI on the PILON (as an example)?

sharpe106

If you are getting say 8 weeks notice pay in one lump sump they work out how much national insurance you would normal have paid in that time and deduct that in one go. 

unkle

sharpe106 said:

If you are getting say 8 weeks notice pay in one lump sump they work out how much national insurance you would normal have paid in that time and deduct that in one go. 

Could get messy then if I start a new job, my PILON is 6 months. One assumes therefore if I started a new job it'd take into account NI already paid for those 6 months?

nick74

unkle said:

sharpe106 said:

If you are getting say 8 weeks notice pay in one lump sump they work out how much national insurance you would normal have paid in that time and deduct that in one go. 

Could get messy then if I start a new job, my PILON is 6 months. One assumes therefore if I started a new job it'd take into account NI already paid for those 6 months?

No, unlike income tax NI is calculated per employment not cumulatively, and your new employer would have no way of knowing how much NI you'd paid previously in any case. 

ffacoffipawb

unkle said:

sharpe106 said:

If you are getting say 8 weeks notice pay in one lump sump they work out how much national insurance you would normal have paid in that time and deduct that in one go. 

Could get messy then if I start a new job, my PILON is 6 months. One assumes therefore if I started a new job it'd take into account NI already paid for those 6 months?

Different employments are treated separately. For example you had 6 jobs each paying £6,000 per annum you would pay no NI at all as each job pays under the lower NI threshold.

chrisbur

ffacoffipawb said:

unkle said:

sharpe106 said:

If you are getting say 8 weeks notice pay in one lump sump they work out how much national insurance you would normal have paid in that time and deduct that in one go. 

Could get messy then if I start a new job, my PILON is 6 months. One assumes therefore if I started a new job it'd take into account NI already paid for those 6 months?

Different employments are treated separately. For example you had 6 jobs each paying £6,000 per annum you would pay no NI at all as each job pays under the lower NI threshold.

If you can try to get at least one job where you earn over the Lower Earnings Limit (currently £120 a week £520 a month )  That way you will be treated as having paid NI and you qualify for everything that paying NI gets you.  You will still not actually pay anything until your weekly wage  goes above £183( or monthly equivalent )

unkle

Seems madness, 6 jobs it is then