NIM01277 | Class 1 structural overview - from April 2009: structural changes: the Class 1 and 2 maximum: example: four Class 1 employments: maximum not reached

Example 6

P Parker has four part-time jobs. In each they earn £200 per week. Their maximum Class 1 NICs liability for the 2021 to 2022 tax year is calculated as follows:

Step 1

Deduct the relevant Primary threshold from the relevant UEL and multiply that figure by 53.

967 - 184 = 783 x 53 = 41,499

Step 2

Multiply the result of step 1 by 12%

41,499 x 12% = 4,979.88

Step 3

Add together so much of the person’s earnings from each employed earner’s employment as exceeded the Primary Threshold but did not exceed the Upper Earnings Limit.

200 (weekly earnings) - 184 (weekly PT) = 16 x 208 (weeks) = 3,328

Step 4

Deduct from the total found at step 3 the amount produced by step 1

3,328- 41,499 = minus 38,171

Step 5

If the figure produced at step 4 is a positive figure multiply that figure by 2%.

If the figure produced at step 4 is a negative figure, it is treated for the purposes of step 8 as nil

Nil

Step 6

Add together so much of the person’s earnings from each employment as exceeded the Upper Earnings Limit.

There are no earnings above the UEL

Step 7

Multiply the result of step 6 by 2%

Not applicable

Step 8

Add together the results of steps 2, 5 and 7.

4979.88 + nil + nil

P Parker’s maximum for the 2021 to 2022 tax year is £4979.88.

The amount of primary Class 1 NICs the employee will pay in each employment on earnings of £200 will not reach the prescribed maximum but they will have met their full Class 1 liability.