NIM01273 - Class 1 structural overview - From April 2009: structural changes: the Class 1 and 2 maximum: examples: three Class 1 employments: static earnings

Example 2

J Howlett has three separate employments. Her total earnings for the 2021 to 2022 tax year are £103,212. She is paid the same monthly earnings in each job. Her maximum Class 1 liability is calculated as follows:

Step 1

Deduct the relevant Primary threshold from the relevant UEL and multiply that figure by 53.

967 - 184 = 783 x 53 = 41,499

Step 2

Multiply the result of step 1 by 12%

41,499 x 12% = 4,979.88

Step 3

Add together so much of the person’s earnings from each employed earner’s employment as exceeded the Primary Threshold but did not exceed the Upper Earnings Limit.

2,867 (monthly earnings) - 797 (monthly PT) = 2,070 x 12 x 3 = 74,520

Step 4

Deduct from the total found at step 3 step the amount produced by step 1

74,520 - 41,499 = 33,021

Step 5

If the figure produced at step 4 is a positive figure multiply that figure by 2%

If the figure produced at step 4 is a negative figure, it is treated for the purposes of step 8 as nil

33,021 x 2% = 660.42

Step 6

Add together so much of the person’s earnings from each employment as exceeded the Upper Earnings Limit.

There are no earnings over the UEL

Step 7

Multiply the result of step 6 by 2%

Not applicable

Step 8

Add together the results of steps 2, 5 and 7.

4,979.88 + 660.42 + nil = 5,640.30

J Howlett’s maximum for the 2021 to 2022 tax year is £5,640.30