NIM12028 - Class 1: Calculating Class 1 NICs for Directors: Annual earnings periods: Examples: Regular monthly salary – 2021 to 2022
Regulation 8 Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)
Director paid £3,000 on 28th of each month starting April 2021 and pays NICs using the directors Standard Method of calculation. Cumulative NICs are shown but amount actually payable each month is difference between amount due and amount previously paid.
| Date | Cumulative | Primary | Secondary | Notes |
|---|---|---|---|---|
| 28 April | £3000 | Nil | Nil | Below LEL |
| 28 May | £6000 | Nil | Nil | Below LEL |
| 28 June | £9000 | Nil | £22.08 ((£9,000 - £8,840) x 13.8%) | No Primary as still below PT |
| 28 July | £12,000 | £291.84 (£12,000 – £9,568 x 12%) | £414 ((£12,000 - £8,840) x13.8% = £436.08 - £22.08) | Directors NICs calculated from earnings year to date and subtract previous months NICs |
| 28 August | £15,000 | £360.00\n ((£15,000 - £9,568) x 12% = £651.84- £291.84) | £414.00 ((£15,000 - £8,840) x13.8% = £850.08 - £436.08) | |
| September to February | Repeat as for August | |||
| 28 March | £36,000 | £360.00\n ((£36,000 -9,568) x 12% = £3171.84 - £2,811.84) | £414\n ((£36,000 - £8,840) x 13.8% = £3,748.08 - £3,334.08) | Earnings for year do not reach the UEL |
If the employer decides to ‘pay on account’ (NIM12026) Class 1 NICs are due from the first month and the employer adjusts the final payment at the end of the year to ensure the same amount of NICs is paid as in the example.