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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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.
Correction
Sorry - long day!
For employee, ignore previous month pay and start again, with 12% + 2% as normal.