Am I paying too much National Insurance?

duncan32

Hello,

I have used the caluculator website and entered my details.

It comes up that I should be paying £10.00 less National Insurance A WEEK than I am currently paying.

I wonder whether this is because of an ongoing mistake from my company's Account's Department?

Anyway, could anyone help / confirm?

My weekly gross is £588.46
Code is 489L
I am contracted out of Serps.

Thanks for any help anyone gives!

Duncan

lipidicman

If you had no pension and no special circumstances then you would pay £54.72 NI a week

I haven't done the calculations regarding the contracting out. We would need more info. What are you paying and what do you think you should be paying? Do you have a pension contribution which results in a rebate, etc.....

duncan32

Hi,

I am paying £55.05 a weel NI and £105.18 Income Tax based on gross earnings of £588.46 / week (and I get a £6.00 weekly bonus for being first aid - not sure where this fits in.

But, every week I clear £398.35 (I also pay £34.43 pension and I am contracted out of SP2).

Hope this is enough info!?!?

I have a meeting with my Managing Director tomorrow, so I am hoping to have all of my facts and figures straight so he can't bamboozle me with numbers!

thanks in advance.

Duncan

WHA

I think you may be misunderstanding "contracted out".

There are two ways of being "contracted out". One is where the company pension scheme itself is contracted out, in which case you pay less national insurance, but the amount of pension deducted increases likewise. This was fairly common for "defined benefit" schemes.

Secondly, is where you are personally contracted out of S2P (prev SERPS) where your national insurance deductions are at the normal full level, but the Government make an annual payment into your personal pension scheme known as the NI rebate. This would show up on your annual pension scheme summaries.

I suspect that in your case, the latter explanation will apply as the figures you quote work out remarkably similar to what NIC would be to a "non contracted out" person - they are calculated at normal rates.

lipidicman

With my pension (university based) I pay less tax and NI because of my pension contributions. This is WHA's first example above, where the scheme itself is contracted out.

I assume Duncan, that your pension contributions are deducted before Tax?

jamesfeatherstone

does any body know anything about opting out of ni contributions for a short while

Murtle

If you are working, AFAIK you can't opt out of paying NI contributions. Why would you want to opt out for a while??