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Employers NI Formula ?

Getting from gross incl Ers Ni to Gross for tax and NI

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I have £50,000 available for distribution as salary to an employee but that will include employers NI.  Using the £8632 nil rate, Is there an easy way to calculate the gross for tax without trial and error ?

Im sure I have this in the past but would appreciate if someone has the answer.

 

Thanks

 

Replies (6)

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By nutwood
19th Nov 2019 12:55

I always find this calculator very useful in these sorts of cases. Only trial and error but very easy to vary amounts until you get the net (plus 'ers NI) result you want.
https://listentotaxman.com/

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Psycho
By Wilson Philips
19th Nov 2019 13:00

Excel —> Goal Seek

Thanks (1)
Hallerud at Easter
By DJKL
19th Nov 2019 13:24

Yes, basic algebra.

You have

50,000= G+ ((G-8632)0.138)
Resolve to
50,000= G+0.138-1191.22
Swop sides

51,191.22=1.138G

So G = 44,983.50

Check calc

(44,983.50-8632) @13.8%= 5,016.51

Gross 44,983.50 + NIER 5,016.51= 50,000.01

Pre computers I did all net to gross type calcs using basic algebra learned during S1-3.

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Replying to DJKL:
Psycho
By Wilson Philips
19th Nov 2019 13:41

Agreed. No need for goal seek either. For any given grossed-up amount (x), G=(x+1191.22)/1.138

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By David Doyle
19th Nov 2019 13:41

Think I've sorted it.

1 Take gross sum
2 Deduct Nil rate Ers band £8,632
3 Apply 13.8/113.8 to give you the Ers NI

Proof

1 Deduct Ers Ni (in 3 above) from your gross
2 Deduct £8632
3 * result by 13.8 %

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By rtrussell01
20th Nov 2019 14:56

Meanwhile you discover another employee on £50,000 salary that has received £1000 of fuel paid by the company for private trips in their own car that the Company wishes to cover. Gross salary would need to be £1,000 /(1-40% IT and 2%NI) = £1,724.14 . Does anyone do it that way ?

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