National Insurance, I need a finance brain extractment

tptvmbircn
tptvmbircn Posts: 782
edited January 2011 in Commuting chat
Hello all,

I'm getting all organised this year and pretty good with excel so doing a few sums and i can't get the NIC correct.

Would someone be willing to tell me in plain english how to calculate this from an annual gross income.

I know it's 11% but do you calculate this figure from the gross or after taxable income, im around £80 out each time and baffled now haha

Many Thanks

Comments

  • dhope
    dhope Posts: 6,699
    Not simply 11%
    http://www.hmrc.gov.uk/ni/intro/basics.htm

    Taken from gross earnings
    If you're employed

    If you're employed you pay Class 1 National Insurance contributions. The rates are:

    * if you earn more than £110 a week and up to £844 a week, you pay 11 per cent of the amount you earn between £110 and £844
    * if you earn more than £844 a week, you also pay an extra 1 per cent of all your earnings over £844
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  • Pep
    Pep Posts: 501
    Fom the gross, but there is a threshold. So, the NI is something like:

    NI_contribution = 0.11 x (gross_income - threshold).

    threshold approx. £5000.

    The aboveequation valid provided gross_income is within a certain range, from threshold (approx £5000), to a maximum value.

    If gross income over maximum value (dunno how much) you use a different equation, I think is no longer 11% but 1%.

    It's all on the HMRC website, in very plain English. If I managed to understand it myself that English is my second language, anyone can.
  • tptvmbircn
    tptvmbircn Posts: 782
    that's excellent, will see what i come up with now!
  • jonginge
    jonginge Posts: 5,945
    Obviously, the rates will change in a couple of months...
    http://www.hmrc.gov.uk/rates/nic.htm
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  • tptvmbircn
    tptvmbircn Posts: 782
    JonGinge wrote:
    Obviously, the rates will change in a couple of months...
    http://www.hmrc.gov.uk/rates/nic.htm

    Yeah I intend to auto calculate by simply updating a cell. I've looked into that also, bit of a can of worms this one!

    many thanks
  • daviesee
    daviesee Posts: 6,386
    If you are self employed like me, I just use the software on the CD the I.R. supply.

    It has the added benefit of automatically completing all your returns.
    None of the above should be taken seriously, and certainly not personally.
  • tptvmbircn
    tptvmbircn Posts: 782
    daviesee wrote:
    If you are self employed like me, I just use the software on the CD the I.R. supply.

    It has the added benefit of automatically completing all your returns.

    unfortunetly not at the moment, hopefully one day i will be self employed!
  • Pep
    Pep Posts: 501
    stealthelite1986 wrote:
    unfortunetly not at the moment, hopefully one day i will be self employed!

    Then why do you calculate your own tax?
    Not that you can't, but certainly you don't have to. It's done for you before they pay your salary.
    Employed people do not normally calculate their tax, don't have to.
  • cee
    cee Posts: 4,553
    Pep wrote:
    stealthelite1986 wrote:
    unfortunetly not at the moment, hopefully one day i will be self employed!

    Then why do you calculate your own tax?
    Not that you can't, but certainly you don't have to. It's done for you before they pay your salary.
    Employed people do not normally calculate their tax, don't have to.

    I do it too....HMRC have been known to overcharge tax, then forget to give it back!
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  • Pep
    Pep Posts: 501
    I do it too....HMRC have been known to overcharge tax, then forget to give it back!

    Now I'm really confused. Is the tax not calculated by the EMPLOYER, rather than by the treasure?
    (well, not sure either can be trusted but never mind ....)
  • cee
    cee Posts: 4,553
    Pep wrote:
    I do it too....HMRC have been known to overcharge tax, then forget to give it back!

    Now I'm really confused. Is the tax not calculated by the EMPLOYER, rather than by the treasure?
    (well, not sure either can be trusted but never mind ....)

    Can't remember the ins and outs...all i know is that every year, i claim a rebate from HMRC as I have usually overpaid tax. I suspect its down to lots of overtime in one month, then standard salary for the rest of the year or something...

    I started to keep a record of earnings and tax, because the HMRC were holding onto more than £1000 of money which I had paid in tax (granted over a few different employers, with some BR in there just to confuse the issue), but it was only when I was speaking to them about something else that they told me about it, and that I could claim it back.
    Whenever I see an adult on a bicycle, I believe in the future of the human race.

    H.G. Wells.
  • navt
    navt Posts: 374
    Pep wrote:
    Now I'm really confused. Is the tax not calculated by the EMPLOYER, rather than by the treasure?
    (well, not sure either can be trusted but never mind ....)

    Employers often get it wrong. They simply calculate deductions using tools/software provided to them by HMRC. Garbage in, garbage out.

    It 'pays' to check :D .
  • tptvmbircn
    tptvmbircn Posts: 782
    yep thats why i'm doing it, to check for tax, calculate some overtime i've been doing and mainly a future forecast of pay
  • tptvmbircn
    tptvmbircn Posts: 782
    very confusing stuff, but as well as using the tables etc i stumbled across this site:

    http://paulbanks.org/projects/ukpaye/

    and it does it for you in spreadsheet format both excel and openoffice calc in case anyone was looking for the same thing heres the quickest way to do just that

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