National Insurance overpayment

dave_ave

My wife only started working in Nov 2020. Her gross pay on her 2020/21 P60 was £11,444.32. She paid no income tax, but paid £898 in National Insurance. If you put the gross salary into an online take home pay calculator it says £225 should have been deducted for NI. She queried it with Payroll and they say it’s correct as they work in monthly deductions (see below). I can’t make sense of it as I presumed NI is paid on anything above the Primary Threshold?

molerat

NIC is per pay period, it is not an annual amount like income tax.  You need to assess each pay packet separately and deduct 12% on anything above the PT.  They are sort of correct as for accounting purposes NI is deducted at 0% above the LEL. up to the PT.

Back of a fag packet calculation, £11444 / 5 = £2288 per month = NI of about £180 per pay packet = £900.  The tax site you used assumed £11444 over 12 months = £953 per pay packet = £19.56 NI x 12 = £234.

Caz3121

dave_ave said:

If you put the gross salary into an online take home pay calculator it says £225 should have been deducted for NI. 

that would assume that the salary had been spread over a full year with 12 pay periods (or 52 if weekly paid)

Asghar

If she hasn't been paid the same each month over the whole tax year then you can input each monthly salary here:

https://salarybot.co.uk/monthly-salary-calculator/

It will show you the NI deductions for each payslip.