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What's the exact formula for calculating employers NI?

I have a spreadsheet to calculate Er's NI contributions per employee. I can't quite get the roundings right though, we're only talking a penny here and there but they all add up and my grand totals are often wrong.

For example, I have one employee who gets £145.92 per week gross. I calculate NI to be 145.92 - 144 = 1.92 x 13.8% = 0.26496. The HMRC calculator says it should be 0.26 so I assume they round down.

But, another employee gets £152.00. NI should be 152 - 144 = 8.00 x 13.8% = 1.104. If I round this down it is 1.10. But HMRC says it is 1.11

So can anyone help me with the exact way in which I should be calculating these?

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23rd Aug 2012 22:30

It's complicated

The answer's here: http://www.hmrc.gov.uk/ebu/ni-guidance2012-13.pdf. This is why we have payroll software :)

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By ajnmx
24th Aug 2012 07:03

Just what I wanted! Thanks.

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By Evey
26th Jul 2016 11:42

Hello,
Just in case you still need this it is:
From previous discussion with HMRC, they are not too worried about the rounding up or down at this stage and they will not adjusted on there year end if there is small differences. As a general rule I round up from 0.5 onwards and down otherwise.
Hope this is helpful

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It is a relief that you have turned up with this information. The OP has had 200 client payrolls that they have been unable to run since they made their post in the absence of this information.

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