National Insurance and State Pensions

3. Making Payments

3.1 You must calculate NICs as a percentage of gross pay (before PAYE and pension contributions).

• Gross pay includes wages/salaries, bonus payments, fees, overtime, petrol allowances (unless charged to a company account), profit-related pay and employees' personal expenses such as telephone bills where paid by the employer for the employee.
• You do not normally make contributions on redundancy payments, payments in lieu of notice, termination payments, pensions, meal vouchers, most childcare, expenses or tips not paid by the employer.
• Contributions are still paid if pay continues during sickness or any other absence.

3.2 The earnings period is the period since the last pay day, typically a week or a month.

• For most directors the earnings period is annual, irrespective of when they are paid.This captures all of a director's earnings.

3.3 You deduct NICs on pay day, at the same time as Pay As You Earn (PAYE).

3.4 You pay NICs to HM Revenue & Customs Accounts Office each month. This can be done quarterly if your average monthly PAYE, NIC and student loan payments are below £1,500.

• NIC payments must reach the Accounts Office by the 19th of the next month.This is separate from your PAYE Tax Office.
• Include form P30B, with your payment.

3.5 End of year payments are due by the following deadlines.

• 19 April for outstanding Class 1 NICs.
• 19 July for any outstanding Class 1A NICs on cars and fuel and other chargeable benefits. A special payslip will be sent to employers in April to accompany payments of Class 1A NICs.Interest is charged on late payments.