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.

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