Follow this topic
Q&A » Tax
For instance if an employees' monthly salary is £400 for the first 11 months of the tax year (therefore NO NI PAYABLE) but in the last month he earns £1,000 (which is above NI threshold), will there be an NI liability (even though overall his annual gross salary works out to be £5,400 - which is below the NI threshold?
Report
58Yes, the employee with still have to pay NI in the final month. NI is calcualted on a per payment basis rather than a projected yearly total (as income tax is). The same is true for student loan payments. Thus if they got paid £100 for 3 weeks work and then £300 for 1 weeks work, then the £300 would be subject to NI.
As far as I understand it, you cannot reclaim NI based on a yearly total either.
The only way to get around it is if the payslip covered several months for an amount below the NI threshold for the same period of time, i.e. the employee got paid once, £5,400 for 12 months work.
Posted on 07 June 2012 |
Love 0 loves
Report
Sign in or register to post an answer.
Register with lovemoney.com to start asking and answering questions on Q&A.
Get started nowRegistered already? Great! You can just sign in to ask and answer questions.
Sign in
Retweet
Comments (
Facebook