National Insurance and State Pensions
3. Making Payments
3.1 You must calculate NICs as a percentage of gross pay (before Pay As You Earn and pension contributions).
- Gross pay includes wages/salaries, bonus payments, fees, overtime, petrol allowances (unless charged to a company account), profit-related pay and personal expenses such as telephone bills where paid by the employer for the employee.
- You do not normally make contributions on redundancy payments, payments in lieu of notice, termination payments, pensions, meal vouchers, most childcare, expenses or tips not paid by the employer.
- Contributions are still paid if pay continues during sickness or any other absence.
3.2 The earnings period is the period since the last pay day, a week or month.
- For most directors the earnings period is annual, irrespective of when they are paid.This captures all of a director’s earnings.
3.3 You deduct NICs on pay day, at the same time as Pay As You Earn (PAYE).
3.4 You pay NICs to HM Revenue & Customs (HMRC) each month. This can be done quarterly if your average monthly PAYE, NIC and student loan payments are below £1,500.
- NIC payments must reach the Accounts Office by the 22nd of the next month (19th where payment is not made electronically).
- Include form P30B with your payment if you are not paying electronically.
3.5 End of year payments are due by the following deadlines:
- 19 April for outstanding Class 1 NICs.
- 19 July for any outstanding Class 1A NICs on cars and fuel and other chargeable benefits. A special payslip will be sent to employers in April to accompany payments of Class 1A NICs. Interest is charged on late payments.
