Employers NI contribution

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 Bottom Clinger 18 Sep 2021

Just checking if I've got this right:

Employers NI is calculated at 13.8% of earnings above the secondary threshold with is £8,788.

So an employee with an annual salary on £30k, the employers contribution is  13.8% of (30,000 - 8,788) = £2,927.

Is this right?

 The New NickB 18 Sep 2021
In reply to Bottom Clinger:

Looks right to me. It’s a system that incentivises employers wanting part time employees and as a result probably increases the need for in work benefits.

 RobAJones 18 Sep 2021
In reply to Bottom Clinger:

No salary sacrifice? 

In reply to RobAJones:

Whats one of them?

 RobAJones 18 Sep 2021
In reply to The New NickB:

> Looks right to me. It’s a system that incentivises employers wanting part time employees and as a result probably increases the need for in work benefits.

But as an infrequent part-timer, I occasionally pay some NI, but no income tax.

 RobAJones 18 Sep 2021
In reply to Bottom Clinger:

What is salary sacrifice?

Salary sacrifice is an arrangement employers may make available to employees – the employee agrees to reduce their earnings by an amount equal to their pension contributions.

And in exchange, the employer then agrees to pay the total pension contributions. So, any contributions paid to us will be treated as employer only.

Using salary sacrifice means that the employee and the employer pay less National Insurance contributions. Employers may decide to maximise the amount of pension contributions by adding the savings they make in lower employer National Insurance contributions to the total pension contribution amount they pay.

If your employer is using a defined contribution scheme (like The People’s Pension), then the qualifying earnings used to meet the minimum requirement are based on the post-sacrifice level of salary.

In reply to RobAJones:

Thanks, forgotten about that (I was in one once).

 RobAJones 18 Sep 2021
In reply to Bottom Clinger:

It does highlight how the NI increase affects low paid/part time workers. You were getting the blame from Mrs J, for me being in a bad mood, until I pointed out City haven't had a shot on target in over an hour. 

In reply to RobAJones:

Hope we get you guys in the FA Cup. Promotion to Championship and another good cup run. UTFTs !!!

 The New NickB 18 Sep 2021
In reply to RobAJones:

> But as an infrequent part-timer, I occasionally pay some NI, but no income tax.

The threshold is lower for the employee than the employer.

 RobAJones 18 Sep 2021
In reply to The New NickB:

> The threshold is lower for the employee than the employer.

It's more that NI is collected weekly. So if I earn say £500 for doing a few days work, I'll pay NI on most of that, but since I'll earn less than 12k annually, won't pay any income tax. I assume this affects seasonal workers/students as well? 

 RedFive 19 Sep 2021
In reply to Bottom Clinger:

Yes, but you (the employer) get a £4k allowance per tax year so until the tax charge reaches that you don't pay Employers NI.

(qualifying conditions apply to the allowance, most small businesses will get it, but not single Director only with no employees other than themselves)

 Levy_danny 21 Sep 2021
In reply to RobAJones:

Affected me when I was on a zero hours contract, tried to get it back but failed lol 

 Rob Parsons 21 Sep 2021
In reply to RobAJones:

> What is salary sacrifice?

> Salary sacrifice is an arrangement employers may make available to employees – the employee agrees to reduce their earnings by an amount equal to their pension contributions.

> And in exchange, the employer then agrees to pay the total pension contributions. So, any contributions paid to us will be treated as employer only. ... etc. ...

So-called 'salary sacrifice' is also for other purposes - e.g. for the 'cycle to work' scheme, and similar. In my opinion the entire thing is a scam and should be gotten rid of. It's classical middle-class tax avoidance.

 RobAJones 21 Sep 2021
In reply to Rob Parsons:

> So-called 'salary sacrifice' is also for other purposes - e.g. for the 'cycle to work' scheme, and similar. In my opinion the entire thing is a scam and should be gotten rid of. It's classical middle-class tax avoidance.

Couldn't agree more why should I have been able to get £400 of a new bike every few years? Doing something like, the first £500 of any bike was VAT exempt, has always seemed like a fairer/simpler system to me, and more likely to meet the aim of getting more people cycling. 

Post edited at 15:39

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