NI contributions on bonus

Costabit

OH is due to receive a bonus payment of £1037 from an employment that finished last year.
This payment will be her only earned income this year.
She is expecting to pay some tax on this but will claim it back later this year but
Will she have to pay the 12% National Insurance on this payment as it is over the £184 per week ?

chrisbur

Costabit said:

OH is due to receive a bonus payment of £1037 from an employment that finished last year.
This payment will be her only earned income this year.
She is expecting to pay some tax on this but will claim it back later this year but
Will she have to pay the 12% National Insurance on this payment as it is over the £184 per week ?

The payment will have NI deducted at 12% on earnings between £184 and £967.  Earnings over that will have 2% deducted.  As NI is done on earnings period not tax years as tax is there would be nothing to reclaim for this payment.

This does assume that your OH is not old enough to be exempt for NI and was originally paid weekly.  If it was a monthly paid job then the NI calculation can get a bit more complicated. 

Costabit

chrisbur said:

Costabit said:

OH is due to receive a bonus payment of £1037 from an employment that finished last year.
This payment will be her only earned income this year.
She is expecting to pay some tax on this but will claim it back later this year but
Will she have to pay the 12% National Insurance on this payment as it is over the £184 per week ?

The payment will have NI deducted at 12% on earnings between £184 and £967.  Earnings over that will have 2% deducted.  As NI is done on earnings period not tax years as tax is there would be nothing to reclaim for this payment.

This does assume that your OH is not old enough to be exempt for NI and was originally paid weekly.  If it was a monthly paid job then the NI calculation can get a bit more complicated. 

She is old enough to draw on her SIPP but too young to draw her state pension , so is not exempt from NI.
She was in a salaried position and was paid monthly , but if it becomes complicated to calculate what NI is due then maybe it best to put our faith in the system and accept what comes re. NI contributions.
Thanks for reply

chrisbur

The complication is that with someone who was paid monthly, a payment after they have left, may be treated as weekly or monthly basis for NI.  Which is used for a bonus would depend on whether the bonus is an "expected bonus" or an "unexpected bonus"

Of course there is always the possibility that the employer is not well acquainted with these rules so may well just pay it on the monthly basis as that is what they did when employed.