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NIM11002 | Class 1: calculating & recording earnings, NICs & NIC rebates: exact percentage method

From HM Revenue & Customs · National Insurance Manual

Regulation 12(1) of the Social Security Contributions Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Employers who use the exact percentage must:

  • calculate the employee and employer NICs separately; and

  • round NICs calculations to the nearest penny (amounts of less than £0.005 are disregarded)

Regulation 12(1)(a) provides that primary and secondary contributions shall be calculated separately.

Regulation 12(1)(b) provides that each such calculation shall be rounded to the nearest penny, with amounts of less than £0.005 being disregarded.