I can't get my head round this one.
Do you have to take your personal pension contributions away from your gross annual salary, and then calculate the national insurance and income tax from the 'new' gross pay?
Or
Do you have to calculate National insurance from the original gross pay, before personal pension deductions?
Thank you
Answer: Deductions are made from pay after private pension contributions have been taken off. You start paying NI when pay reaches £110 a week, or £476.66 a month. See http://www.hmrc.gov.uk/rates .
How Do You Calculate National Insurance To Pay If Your Self Employed And Earned £100,000.?
Question by ibs | Posted in United Kingdom
The following are for -2009-2010
Upper backet for 20% tax = £37,400.00
Lower bracket for NI = £5,715.00
Upper bracket for NI = £43,875.00
Pesonal allowance =£6,475.00
my initial calculations: -
Year - 2009-2010
Gross Income£100,000
Personal Allowance£6,475
Total Taxable£93,525 =£100,000 - £6,475
Income Tax
At 20%£7,480= £37400 * 0.2
At 40%£22,450= (£93,525 - £37,400) * 0.4 = £56,125 * 0.4
Total£29,930
National Insurance£4,758.85(I dont know where this valusue came from)
Total Deductions£34,688.85
Net Income£65,311.15
So the
Answer: DMS is wrong - he has given you details for employees.
Self employed people pay class 2 NIC's of £2.40pw.
On top of that they pay class 4 NIC's on profits between £5715 and £43,875pa. at 8%.
Your tax calculation above is correct.
NIC is 38160 @ 8% = 3052.80
Need to deduct capiat allowances before you charge the NIC - does this help?
My tax rate is always 22% but the National insurace(NI) is always changing!!
is there any certain rates for certain amounts like the tax rate.
Eg for tax , the first 5220 is non taxable then..10% ..22% and so on.
Whats the rates and thresholds for NI??
Answer: NICs are based on income bands,between £100 and £670pw it's 11%. Over £670 (still within the 22% tax band) it's 1%.
It will only vary as income varies.
How Do I Calculate How Much Tax And National Insurance I Pay On My Earnings?
Question by Tom T | Posted in United Kingdom
I am a student and am working throughout the summer break. I work 5 days a week and earn £300, however, only £250 comes to me because of tax and national insurance. I am trying to work out whether by only working 4 days a week I would actually go away with a similar amount of money. Thanks for any responses.
Also remember that if you are earning under £6035 per year you get all your tax back anyway when it gets to April if your tax code is the standard 603L. Your employer deducts it anyway, as if you would be working all year, because it's automatically done by computer. That's why you have to wait until April to claim it back. Phone the tax office and ask them how to do this.
I think the online calculator won't allow you to type in a salary less than this anyway, because it calculates by year, and you would pay no tax on it.
How Is National Insurance Contributions Calculated?
Question by naughty boy | Posted in United Kingdom
I would like to understand how national insurance contributions are calculated. My P60 states the following :
NIC table letter - D (what does this D mean)
Earnings at LEL - 2912
Earnings above the lel upto and including Earnings Threshold - 448
Earnings above earnings threshold, upto and including the UEL- 18580.
Answer: The table letter D means that you are "Contracted out" of the state second pension. You pay a lower rate of national insurance and a contribution is made to some non-government scheme (either run by your company or a private pension plan).
No NI is payable on earnings up to the Lower Earnings Limit (LEL).
The earnings between the LEL and the Primary Threshhold (PT) are subject to NI but the rate is currently 0%. (this might sound silly but there is a different treatment for benefits between someone who hasn't paid NI and someone who has paid nothing but their earnings are in that 0% band)
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If you are self employed then that means you are receiving your money without any tax taken off from it. You need to register with HMRC as self employed within three months after you have started to trade as a sole trader/self employed. If you are not sure if you are self employed /a sole trader, see our article: When am I classed as self employed / sole trader.
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