Contracted-out contributions for employers with Contracted-out Salary Related Schemes

Transcription

1 CA39 Nationa Insurance Contributions Tabes Contracted-out for empoyers with Contracted-out Saary Reated Schemes Use from 6 Apri 2008 to 5 Apri 2009 incusive

2 Hep further guidance Hep further guidance about tax Nationa Insurance (NICs) is avaiabe from the foowing sources. The Internet Go to our website at Your Empoyer CD-ROM Your Empoyer CD-ROM has most of the forms guidance you wi need to run your payro throughout the year. The CD-ROM has: a P11 cacuator that wi work out record your empoyees' tax, NICs Student Loan deductions every pay day with a inked P32 record of deductions that works out what you need to pay us. a range of other Cacuators that work out car car fue benefit, Statutory Payments Student Loan deductions. a P45 checker that tes you what gross pay tax to date figures to enter on the P11 for a new empoyee. There is aso: a Learning Zone to hep you underst payro topics such as Statutory Payments, Student Loan deductions PAYE Onine. a Payro Basics section for new ess experienced empoyers expaining what to do when empoying someone for the first time. Empoyer Hepbooks Our Empoyer Hepbooks are designed to hep you underst operate PAYE, NICs other payro reated matters. The Hepbooks are for guidance ony, they are not comprehensive have no ega force. We aso have many other eafets bookets that give further guidance, for exampe CWG2(2008) Empoyer Further Guide to PAYE NICs CWG5(2008) Cass1A NICs on benefits in kind 480(2008) Expenses Benefits - a tax guide 490(2008) Empoyee trave - A tax NICs guide for empoyers. You can view, downoad print the fu range of Hepbooks, bookets other forms guidance from our website at or your Empoyer CD-ROM. Or you can order copies from the Empoyer Orderine: from our website at by phone by fax Forms guidance in Braie, arge print audio For detais of empoyer forms guidance in Braie, arger print or audio ca the Empoyer Orderine on ask to speak to the Customer Service Team. Yr Iaith Gymraeg Ffoniwch i dderbyn fersiynau Cymraeg o ffurfenni a chanawiau. By phone - Empoyer Hepines (We may record cas for quaity training purposes.) New empoyers New Empoyer Hepine empoyers with ess than years payro experience Monday to Friday 08:00-20:00 Saturday Sunday 08:00-17:00 Empoyers with more than Empoyer Hepine 3 years payro experience Monday to Friday 08:00-20:00 Saturday Sunday 08:00-17:00 If you have a hearing or speech impairment, (ony peope with speciaised use a textphone equipment such as Mincom are abe to use this service.) A ist of Hepines opening hours is avaiabe on our website at on your CD-ROM, in your Empoyer Buetin. Your HM Revenue & Customs office Your own HM Revenue & Customs office can aso hep you. A our office contact detais are on our website at Pease te us your Empoyer reference which is on correspondence from your HM Revenue & Customs office. In Person We can offer you education support on a aspects of your payro expaining what you need to do the deadines you need to meet the forms you need to fi in the records you need to keep. We aso have a range of workshops which are free of charge on many payro topics. You can get further information about the workshops from our website at or you can ca the New Empoyer Hepine on Empoyer Hepine on Onine Services For information about our onine services go to For hep assistance using our onine services contact the Onine Services Hepdesk. E mai hepdesk@ir-efie.gov.uk teephone open 7 days a week 08:00-20:00.

3 Contents page Save money - avoid errors 2 Which Nationa Insurance Tabes to use 3 Layout of these tabes 4 Using these tabes to work out NICs 5 Earnings imits NIC rates 7 An exampe of working out recording NICs using the exact percentage method, where the empoyee is a member of your Contracted-out Saary Reated scheme 8 An exampe of working out NICs using these tabes recording figures on form P11 9 D - Weeky tabe for Contracted-out Saary Reated stard rate 10 D - Monthy tabe for Contracted-out Saary Reated stard rate 23 E - Weeky tabe for Contracted-out Saary Reated reduced rate 37 E - Monthy tabe for Contracted-out Saary Reated reduced rate 50 L - Weeky tabe for Contracted-out Saary Reated where empoyee has deferment 64 L - Monthy tabe for Contracted-out Saary Reated where empoyee has deferment 77 Working out recording NICs where empoyee s tota earnings exceed the 91 Additiona gross pay tabe 92 Changes for the tax year At the time this eafet was printed, changes in the rates of Nationa Insurance for the tax year were sti subject to Pariamentary approva. Shoud Pariamentary approva not be obtained, HM Revenue & Customs wi inform you of any further changes before 6 Apri

4 Save money - avoid errors You may find this checkist usefu when competing your Empoyer Annua Returns have you used the correct P11 P14? P11 must show Year to Apri 2009 in the eft-h corner. P14 must show in the right-h corner have you used the correct Nationa Insurance tabes, or percentage rates - are they for the current year? do you hod a vaid certificate (CA4139, CF383 or CF380A) for every married woman or widow for whom you deduct category B, E or G reduced rate? If not, deduct fu rate at category A, D or F have you any empoyees nearing State Pension age? Check their date of birth before you decide which contribution category etter to use. Use category C for empoyees for whom you hod a vaid age exemption certificate when competing your P14s - have you shown the empoyee s fu name, Nationa Insurance number, where known, address date of birth? - is the correct category of contribution shown? This is usuay either A, B, C, D, E, F, G, J, L or S. - have you checked that your addition is correct before entering the contribution amounts? (both sides of P11 added up carried forward) is the information from every P14 summarised on your P35? do you operate a company pension scheme that is contracted-out of the State Second Pension, previousy known as the State Earnings Reated Pension Scheme? If so, don t forget to show your Empoyer s Contracted-out Number on your P35 reminder - if the contribution category is F, G or S, mariners equivaent or Stakehoder Pension, don t forget to show the reevant Scheme Contracted-out Number on the P14. Something you may wish to consider throughout the year to make sure the correct information is hed make sure your staff know they must notify you HM Revenue & Customs Nationa Insurance Contributions Office of any change in circumstances, for exampe, change of address, change of name particuary divorce if they pay category B, E or G. Software has your software been upgraded for

5 Which Nationa Insurance Tabes to use You must use the correct Tabes in cacuating the NICs due on your empoyee s earnings Check you are using the Tabes for If your empoyee is under 16 years of age there is no NICs iabiity. Is your empoyee State Pension age or over? Yes Use Tabe Letter C (see eafet CA41) No Is your empoyee a member of your Contracted-out occupationa pension scheme? No Does your empoyee have another job where they aready pay NICs on earnings at, or above, the Upper Earnings Limit you hod form CA2700? No Is your empoyee a married woman or widow who is entited to pay reduced rate NICs? Yes Yes No Yes Use Tabe Letter J (see eafet CA38) Use Tabe Letter B (see eafet CA41) Use Tabe Letter A (see eafet CA38) Is your scheme Contracted-out Saary Reated? Yes Does your empoyee have another job where they aready pay NICs on earnings at, or above, the Upper Earnings Limit you hod form CA2700? No Is your empoyee a married woman or widow who is entited to pay reduced rate NICs? Yes Yes No No Use Tabe Letter L (see eafet CA39) Use Tabe Letter E (see eafet CA39) Use Tabe Letter D (see eafet CA39) Is your scheme Contracted-out Money Purchase? Yes Does your empoyee have another job where they aready pay NICs on earnings at, or above, the Upper Earnings Limit you hod form CA2700? No Is your empoyee a married woman or widow who is entited to pay reduced rate NICs? Yes Yes No Use Tabe Letter S (see eafet CA43) Use Tabe Letter G (see eafet CA43) Use Tabe Letter F (see eafet CA43) If you empoy mariners, the CA42 Nationa Insurance Tabes gives detais of category etters, rates imits to use. Important - pease note NIC Tabes are renewed every Tax Year. These can be requested from the Empoyer Orderine on Check you are using the Tabes for You must use the correct Tabes when cacuating the NICs due on your empoyee s earnings. 3

6 Layout of these tabes The first earnings figure in each tabe is the Lower Earnings Limit (LEL) ( 90 weeky or 390 monthy). This is because NIC iabiity ony arises when the empoyee s tota earnings in the earnings period reach the LEL, even though no NICs are actuay payabe on those earnings. Both the empoyee the empoyer pay NICs ony when the empoyee s earnings exceed the Earnings Threshod (ET) ( 105 weeky or 453 monthy). But, for stard rate NICs, earnings between the LEL the ET are used to protect the empoyee s entitement to benefit. The empoyee the empoyer pay NICs at the appropriate main percentage rate on earnings between the ET the Upper Earnings Limit (). The ast earnings figure in each tabe is the ( 770 weeky or 3337 monthy). This is because empoyee s are due ony at a rate of 1% on earnings above the. The empoyer pays at the rate of 12.8% on earnings above the. The figures in the eft-h coumn of each tabe show steps between the LEL the. The NIC iabiity for each step is based on the earnings imits percentage rates shown on page 7 with the exception of the LEL, ET is cacuated at the mid-point of the steps. Therefore, you your empoyee may pay sighty more or ess than if you used the exact percentage method to cacuate the NICs due. In addition, if you have your own occupationa pension scheme which is contracted-out of the State Second Pension, the NIC rebates due between the LEL the ET to which the empoyee /or empoyer are entited, have been taken into account in the amount of NICs shown in coumns. Pease note, depending on the eve of the empoyee s earnings, the resuting tota NICs figure can be a negative amount. This is denoted by an R immediatey before the entry in coumn. Where the empoyee s tota earnings fa between the LEL the, if the exact figure is not shown in the tabes, use the next smaer figure shown. Where the empoyee s tota earnings exceed the, see page 91. For instructions on how to compete form P11, see the Empoyer Hepbooks. An exampe of form P11 is aso shown on page 8. Important message You must not use the tabes in this eafet to work out NICs if you have a Contracted-out Money Purchase Scheme. If you have a Contracted-out Money Purchase Scheme use the tabes in CA43 Nationa Insurance Tabes: Contracted-out minimum payments for empoyers with Contracted-out Money Purchase Schemes. 4

7 Using these tabes to work out NICs Introduction About these tabes You can work out NICs by using either these tabes, or the exact percentage method. For information about using the exact percentage method, pease see the Hepbook E13 Day-to-day Payro. For genera information about NICs, see the Empoyer Hepbooks. The three different sets of tabes under etters D, E L each contain two tabes, for weeky pay intervas, monthy pay intervas. The etters D, E L correspond with the contribution Tabe etter under which NICs are payabe. Identifying the correct tabe to use Are you using the correct tabes? It is very important that you use the right tabe for each empoyee. Ony use these tabes between 6 Apri Apri 2009, that is, the tax year. Ony use the tabes if you have your own occupationa pension scheme which is contracted-out of the State Second Pension, previousy known as the State Earnings Reated Pension Scheme it is a Contracted-out Saary Reated Scheme, or the saary reated part of a Contracted-out Mixed Benefit Scheme, the empoyee is a member of the scheme. If you have such a scheme, you wi have been aocated an Empoyer s Contracting-out Number by HM Revenue & Customs. Do not use these tabes for empoyees in a Contracted-out Money Purchase Scheme, Contracted-out Money Purchase Stakehoder Pension Scheme or in the money purchase part of a Contracted-out Mixed Benefit Scheme. If you have one, use the tabes in the CA43 Nationa Insurance Tabes, Contracted-out minimum payments for empoyers with Contracted-out Money Purchase Schemes for these empoyees men who are aged 65 or over women who are aged 60 or over, or empoyees who choose an Appropriate Persona Pension or Appropriate Persona Pension Stakehoder Pension instead of - a contracted-out occupationa pension scheme, or - State Second Pension, previousy known as the State Earnings Reated Pension Scheme. Use CA38 Nationa Insurance Tabes, Not contracted-out for empoyers for these empoyees. Tabe D Use this tabe for a mae empoyees aged 16 to 64 who are in your Contracted-out Saary Reated Scheme or the saary reated part of your Contracted-out Mixed Benefit Scheme, a femae empoyees aged 16 to 59 who are in your Contracted-out Saary Reated Scheme or the saary reated part of your Contracted-out Mixed Benefit Scheme paying stard rate empoyee s NICs. Tabe E Use this tabe for married women or widows aged under 60 who are in your Contracted-out Saary Reated Scheme or the saary reated part of your Contracted-out Mixed Benefit Scheme, who are entited to pay empoyee s NICs at the reduced rate. For these women, you must have a vaid form CA4139 or CF383, Certificate of Eection, or form CF380A, Certificate of Reduced Liabiity. Tabe L Use this tabe for empoyees who are in your Contracted-out Saary Reated Scheme or the saary reated part of your Contracted-out Mixed Benefit Scheme, for whom you hod form CA2700 authorising deferment of empoyee s NICs at the fu main percentage rate. 5

8 How to use these tabes Step Action 1 decide which tabe, D, E or L weeky or monthy, is the right tabe for the empoyee 2 ook up the empoyee s gross pay in the eft h coumn of the tabe. If the empoyee s tota earnings fa between the LEL the the exact amount is not shown, use the ower amount cosest to the exact gross pay. If the empoyee s tota earnings exceed the, see page record the figures in each coumn of the tabe onto the empoyee s Deductions Working Sheet, form P11. See the exampe on page 9. Note: the coumn headings on the tabes, incuding the coumn numbers, correspond to the headings numbers on the form P11 Deductions Working Sheet. If you are unhappy with our service If you are unhappy with any aspect of the service you have received from HM Revenue & Customs, you shoud compain to the manager at the office you have been deaing with. Adapting these tabes for pay intervas other than weeky or monthy If the empoyee is paid in mutipes of a week or month Step Action 1 divide the pay into equa weeky or monthy amounts to get an average weeky or monthy amount 2 find the amount of NICs due for the average weeky or monthy amount 3 mutipy the amount of NICs by the number of weeks or months that the earnings are paid for 4 record the mutipied amounts on their form P11 Deductions Working Sheet. To adapt these tabes to work out NICs for a company director see CA44 Nationa Insurance for Company Directors. 6

9 Earnings imits NIC rates Empoyee s contribution Empoyer s contribution Empoyee s NIC rebate on earnings above the LEL, up to incuding the ET Empoyer s NIC rebate on earnings above the LEL, up to incuding the ET Earnings imits Contribution tabe etter D Contribution tabe etter E Contribution tabe etter L Tabe etters D, E L (Appies to contribution category etters D L ony) beow 90 weeky, or Ni Ni Ni Ni Ni Ni beow 390 monthy, or beow 4,680 yeary 90 to 105 weeky, or 0% 0% 0% 0% 390 to 453 monthy, or 4,680 to 5,435 yeary to 770 weeky, or to 3,337 monthy, or 5, to 40,040 yeary Over 770 weeky, or over 3,337 monthy, or over 40,040 yeary 9.4% on earnings above the ET 9.4% on earnings above the ET, up to incuding the, then 1% on a earnings above the 4.85% on earnings above the ET 4.85% on earnings above the ET, up to incuding the, then 1% on a earnings above the 1% on earnings above the ET 1% on a earnings above the ET 9.1% on earnings above the ET 9.1% on earnings above the ET, up to incuding the, then 12.8% on a earnings above the 1.6% on earnings from 90.01, up to incuding (or monthy or annua equivaents) 3.7% on earnings from 90.01, up to incuding (or monthy or annua equivaents) 7

10 An exampe of working out recording NICs using the exact percentage method, where the empoyee is a member of your Contracted-out Saary Reated scheme A monthy paid mae empoyee in your Contracted-out Saary Reated scheme earns , payabe on 29 Apri 2008 (tax month 1). NICs are due under Monthy Tabe etter D. Primary (empoyee s) : ( ) x 9.4% = x 9.4% = = Less empoyee s NIC rebate due on earnings between the LEL the ET: ( ) x 1.6% = 1.01 Primary (empoyee s) after offset of NIC rebate to be entered in coumn of form P11: = Secondary (empoyer s) : ( ) x 9.1% = x 9.1% = = Less empoyer s NIC rebate due on earnings between the LEL the ET: ( ) x 3.7% = 2.33 Secondary (empoyer s) after offset of NIC rebate: = Tota (empoyee s empoyer s) to be entered in coumn of form P11: = Extract from Form P11 Month number 1Week number For Empoyer s use Nationa Insurance Note: Earnings at the LEL (where earnings are equa to or exceed the LEL) Earnings detais Earnings above the LEL, up to incuding the ET p Earnings above the ET, up to incuding the p LEL = Lower Earnings Limit; ET = Earnings Threshod; = Upper Earnings Limit Contribution detais Tota of empoyee s empoyer s - mark minus amounts R p Empoyee s due on a earnings above the ET p Statutory payments Statutory Sick Pay (SSP) paid to empoyee in the week or month incuded in coumn 2 1f p Statutory Maternity Pay (SMP) paid to empoyee in the week or month incuded in coumn 2 1g p Statutory Paternity Pay (SPP) paid to empoyee in the week or month incude in coumn 2 1h For tips on competing form P11, see the Empoyer Hepbooks. For an exampe of a competed form P11, see the Hepbook E10 Finishing the tax year up to 5 Apri

11 An exampe of working out NICs using these tabes recording figures on form P11 Exampe A monthy paid mae empoyee in contracted-out empoyment earns , payabe on 29 Apri 2008 (tax month 1). NICs are due under Monthy Tabe etter D. The nearest ower figure to is 882. Record the figures shown in the tabe onto the empoyee s form P11. Extract from Monthy tabe D Empoyee s Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a incuding the exceed incuding incuding empoyer s earnings Empoyer s the LEL) the ET the above the ET Extract from Form P11 Nationa Insurance Note: LEL = Lower Earnings Limit; ET = Earnings Threshod; = Upper Earnings Limit Statutory payments Month number 1Week number For Empoyer s use Earnings at the LEL (where earnings are equa to or exceed the LEL) Earnings detais Earnings above the LEL, up to incuding the ET p Earnings above the ET, up to incuding the p Contribution detais Tota of empoyee s empoyer s - mark minus amounts R p Empoyee s due on a earnings above the ET p Statutory Sick Pay (SSP) paid to empoyee in the week or month incuded in coumn 2 1f p Statutory Maternity Pay (SMP) paid to empoyee in the week or month incuded in coumn 2 1g p Statutory Paternity Pay (SPP) paid to empoyee in the week or month incude in coumn 2 1h For tips on competing form P11, see the Empoyer Hepbooks. For an exampe of a competed form P11, see the Hepbook E10 Finishing the tax year up to 5 Apri

12 Weeky tabe for Contracted-out Saary Reated stard rate for use from 6 Apri 2008 to 5 Apri 2009 Tabe etter D Use this tabe for empoyees in your Contracted-out Saary Reated Scheme or the saary reated part of your Contracted-out Mixed Benefit Scheme, who are age 16 or over under State Pension age (65 for men, 60 for women). Do not use this tabe for married women or widows who have the right to pay reduced rate empoyee s, see tabe E empoyees who are State Pension age or over, see eafet CA41 empoyees in your Contracted-out Saary Reated Scheme or the saary reated part of your Contracted-out Mixed Benefit Scheme for whom you hod form CA2700, see tabe L empoyees who have an Appropriate Persona Pension or Appropriate Persona Pension Stakehoder Pension, see eafet CA38 empoyees contracted-out in a Contracted-out Money Purchase Scheme, Contracted-out Money Purchase Stakehoder Pension Scheme or in the money purchase part of a Contracted-out Mixed Benefit Scheme, see eafet CA43. Competing Deductions Working Sheet, form P11 or substitute enter D in the space provided in the End of Year Summary box of form P11 copy the figures in coumns - of the tabe to coumns - of form P11 on the ine next to the tax week in which the empoyee is paid. If the empoyee s tota earnings fa between the LEL the the exact gross pay is not shown in the tabe, use the next smaer figure shown. If the empoyee s tota earnings exceed the, see page 91. The figures in the eft-h coumn of each tabe show steps between the LEL the. The NICs iabiity for each step, with the exception of the LEL, ET, is cacuated at the mid-point of the steps so you your empoyee may pay sighty more or ess than if you used the exact percentage method. Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s Up to incuding No NIC iabiity, make no entries on forms P11 P R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R for information ony - do not enter on form P11 Deductions Working Sheet

13 Weeky tabe Tabe etter D Empoyee s Earnings at the LEL Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s incuding the equa to or ET, up to due on a exceed incuding incuding empoyer s earnings Empoyer s the LEL) the ET the above the ET for information ony - do not enter on form P11 Deductions Working Sheet 11

14 Tabe etter D Weeky tabe Earnings at the LEL Earnings Empoyee s (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a incuding the exceed incuding incuding empoyer s earnings Empoyer s the LEL) the ET the above the ET for information ony - do not enter on form P11 Deductions Working Sheet

15 Weeky tabe Tabe etter D Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet 13

16 Tabe etter D Weeky tabe Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet

17 Weeky tabe Tabe etter D Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet 15

18 Tabe etter D Weeky tabe Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet

19 Weeky tabe Tabe etter D Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet 17

20 Tabe etter D Weeky tabe Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet

21 Weeky tabe Tabe etter D Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet 19

22 Tabe etter D Weeky tabe Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet

23 Weeky tabe Tabe etter D Empoyee s incuding the Earnings at the LEL (where earnings are equa to or exceed the LEL) Earnings above the LEL, up to incuding the ET Earnings above the ET, up to incuding the Tota of empoyee s empoyer s Empoyee s due on a earnings above the ET Empoyer s for information ony - do not enter on form P11 Deductions Working Sheet 21

24 Tabe etter D Weeky tabe Earnings (where above the Earnings Tota of Empoyee s earnings are LEL, up to above the empoyee s equa to or ET, up to due on a exceed incuding incuding empoyer s earnings the LEL) the ET the above the ET Empoyee s incuding the Empoyer s If your empoyee s gross pay is over 770, go to page for information ony - do not enter on form P11 Deductions Working Sheet