Backdated pay rise paid as lump sum, NI taken from months salary

marfy

I work for the NHS in Scotland.  As shown in the news, it took a long time to agree on the pay rise for 2022/23.  This was paid as a lump sum in our salary for February 2023.  Because of this I've had national insurance taken from my salary: I work 15 hours a week and this keeps me well below the threshold.  I've contacted our payroll department and they just say I've been charged NI because my salary is above the threshold for that month and there's nothing they can do about it.  I can't afford to lose this money - any help or advice would be much appreciated.

GrumpyDil

Exactly this, unlike tax NI is calculated based on the gross pay in the pay period and not over the year.  

This impacts my daughter who has started a job recently from university, doesn't pay tax because of her YTD earnings but is paying NI. 

JReacher1

Have you lost money or even with the NI deduction have you received more money this month than you will do normally?

Its annoying but unfortunately NI is calculated on a monthly basis so you can’t get this money back. 

Dazed_and_C0nfused

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim02065

penners324

A good reason the government should have continued with thr plan to merge paye and ni together 

MattMattMattUK

penners324 said:

A good reason the government should have continued with thr plan to merge paye and ni together 

As much as it would make absolute sense it will never happen, it would raise the tax rate paid by pensioners and they are too big of an electorate demographic for any political party to raise taxes substantially on them. 

SiliconChip

MattMattMattUK said:

penners324 said:

A good reason the government should have continued with thr plan to merge paye and ni together 

As much as it would make absolute sense it will never happen, it would raise the tax rate paid by pensioners and they are too big of an electorate demographic for any political party to raise taxes substantially on them. 

Plus of course high earners are only paying a marginal NI rate of 2% so the current government at least would never make a change that could hit their biggest supporter group harder.

MattMattMattUK

SiliconChip said:

MattMattMattUK said:

penners324 said:

A good reason the government should have continued with thr plan to merge paye and ni together 

As much as it would make absolute sense it will never happen, it would raise the tax rate paid by pensioners and they are too big of an electorate demographic for any political party to raise taxes substantially on them. 

Plus of course high earners are only paying a marginal NI rate of 2% so the current government at least would never make a change that could hit their biggest supporter group harder.

How would that make any difference? The additional rate of income taxation would rise to 47%, which is the same as the current 45% IC + 2% NI.
The bands would effectively become:
Starting rate: 32%
Higher rate: 42%
Additional rate: 47%

SiliconChip

MattMattMattUK said:

SiliconChip said:

MattMattMattUK said:

penners324 said:

A good reason the government should have continued with thr plan to merge paye and ni together 

As much as it would make absolute sense it will never happen, it would raise the tax rate paid by pensioners and they are too big of an electorate demographic for any political party to raise taxes substantially on them. 

Plus of course high earners are only paying a marginal NI rate of 2% so the current government at least would never make a change that could hit their biggest supporter group harder.

How would that make any difference? The additional rate of income taxation would rise to 47%, which is the same as the current 45% IC + 2% NI.
The bands would effectively become:
Starting rate: 32%
Higher rate: 42%
Additional rate: 47%

So you don't think they'd take the opportunity to just add 12% to all current income tax rates? Your view of governments is more generous than mine!

marfy

JReacher1 said:

Have you lost money or even with the NI deduction have you received more money this month than you will do normally?

Its annoying but unfortunately NI is calculated on a monthly basis so you can’t get this money back. 

Yes, I've lost just short of £78.

marfy

Dazed_and_C0nfused said:

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim02065

Thank you for that link.  Looks like I've lost out