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Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Sat Jan 08, 05 11:12 am Post subject: Payroll software

Does anyone know of any free software that I could use to check my pay I get? Especially NI deductions. This is not as daft as it sounds as I've often found small errors with pay in the past when it's run through a different app and it always helps to check. It is also to make sure that I have paid enough NI rather than the fact I may be due a refund.

This is especially true when working on a contractor / temp basis.

neilk

Joined: 24 Nov 2004
Posts: 241

Posted: Sat Jan 08, 05 1:08 pm Post subject:
https://www.i-resign.com/uk/financialcentre/tax_calculator.asp Any use?

Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Sat Jan 08, 05 1:34 pm Post subject:

That's a good site for people at work.

I don't think it's what I need. Basically I'm an IT temp and get paid via an agency.

So, I know my hourly rate which I work out what the company gets. They then hold back holiday pay, take a small fee and then take off Employers NI ('NIC ERs' on my pay details

), NI EEs & Tax.

It's the NI ERs that I think is dodgy so I need some payroll software as most personal tax calcs don't handle NIC ERs.

Fullup

Joined: 09 Dec 2004
Posts: 183
Location: Under water

Posted: Mon Jan 10, 05 12:02 pm Post subject:

Hi Treacodactyl

National insurance contributions are a non cumulative tax, unlike PAYE. As such you can work them out on a weekly/monthly basis as long as you know the rates and limits.

For the current tax year assuming you are on �Table A� which covers most people the rates are as follows:

Employers 12.8%
Employees 11% upto Upper Earnings Limit (UEA) and 1% thereafter.

The limits are:

Lower Earning limit LEL �79(wkly) �343(mthly) �4108(yrly)
Earnings Threshold ET �91(wkly) �395(mthly) �4745(yrly)
Upper earnings limit UEL �610(wkly) �2644(mthly) �31720(yrly)

It�s probably easier to see the calculations as an example so here goes:

Assume NI able pay (basic + overtime + bonus etc) was �3,500 paid monthly:

As in this example the earnings are above the UEL the NI ees is a two staged calculation

NI ees
Step 1 �3,500 - �2644(UEL) = �856 x 1% = � 8.56
Step 2 �2644 - �395(ET) x 11% = �247.39

Total NI ees = �8.56 + �247.39 = �255.95

If the earnings were less than the upper earnings limit you would simply omit the two staged calculation and take the earnings less the earnings threshold (ET) and multiply by the rate (11%)

NI ers

�3,500 - �395(ET) x 12.8% = �397.44

Total NI = �255.95(ees) + �397.44 (ers) = �653.39

I know this seems a very long winded explanation but I hope it makes sense.

Phew time for a rest now my head hurts

tahir

Joined: 28 Oct 2004
Posts: 45674
Location: Essex

Posted: Mon Jan 10, 05 12:07 pm Post subject:

Fullup wrote:

Phew time for a rest now my head hurts

Not surprised

well done fullup

Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Mon Jan 10, 05 12:23 pm Post subject:

Many thanks Fullup, I think I have most of those details although the government site wasn't the most useful. I'll go through my calcs again.

It's strange about NI being non cumulative tax as it means if you only work a few months (but a large number of hours) you end up paying a very large % of NI compared to someone working for a similar amount over a whole year.

It also means if you can sort out your pay to take a large amount in a single month you avoid a good bit EE NI, i.e. you only pay the 1% above UEA. Hence the large bonuses I suppose.

Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Mon Jan 10, 05 12:47 pm Post subject:
Looking at the example, don't you take the gross pot and take off the NI ERs first, then use what's left to take off the EEs?

Fullup

Joined: 09 Dec 2004
Posts: 183
Location: Under water

Posted: Mon Jan 10, 05 1:18 pm Post subject:
Unfortunatley not, the NI is two separate calculations for ER's and EE's based on the same earnings. As you can see when you look at EE's & Er's together its quite a large tax!

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Thu Jan 20, 05 8:38 pm Post subject:

I've realised what I've got wrong. Being a contractor/temp I use another company to pay me. So, for example, if I get �10 / hour and this needs to be paid I calculated ER NI as 12.8% of �10. Which is wrong as the �10 includes the ER NI. So it works out as �1.13 ER NI and �8.87 gross pay. (8.87 * 12.8%)

I'm not taking into account limits. Not sure if this is of any use to anyone but it confused me.

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