National insurance upper earnings limit

National insurance upper earnings limit

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If an employee (not a director) earns e.g. £50,000 in one month his national insurance would be partly at 12% and partly at 2%.  If the next month his earnings are say £5,000, does he pay NI at 12% or 2% as his total earnings exceed the upper earnings limit?

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By Mini Me
05th Aug 2011 12:28

Table method or not

Generally directors should be dealt with on cumulative basis, not monthly like all other employees. The system therefore works very similarly to PAYE.

See http://www.hmrc.gov.uk/nitables/ca44.pdf for further details.

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Replying to Moonbeam:
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By cgreen37
05th Aug 2011 12:35

Thanks but this is an employee not a director so it's not on a cumulative basis.

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By Mini Me
05th Aug 2011 12:40

Correction

Sorry - long day!

For employee, ignore previous month pay and start again, with 12% + 2% as normal.

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