Why are the NI figures for my employee coming out as zero?
There are four possible reasons for this:
1) The NIC table letter is set to C or X
2) The employee pay in that period does not exceed the Earnings Threshold.
3) If the employee is a company director, the NI is calculated over a longer period - typically a year. This often leads to zero NI in the first few periods of the year and then higher NI figures later in the year. Full details are given in the HMRC Help Book CA44 (http://www.hmrc.gov.uk/nitables/2006/ca44.pdf)
4) If the employee has a contracted out pension and is paid slightly more than the Earnings Threshold.
The Earnings Threshold for 2008/2009 is
- £105 per week or
- £453 per month or
- £5,435 per year
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