188体育

The last stage in the calculation of the Deemed Employment Payment (DEP) is to take the figure at Step Three and apportion it between the DEP and the Employer鈥檚 Class 1 NICs due on that payment. This section provides details of the two formulae for doing so.

If, at the time a payment or benefit is received by the worker, the amount of earnings paid by the MSC to the worker is greater than the employer鈥檚 earnings threshold for Employer鈥檚 Class 1 NICs at the time the payment or benefit is made

The DEP is equal to the amount at Step Three multiplied by 100/(100+b), where b is the Employer鈥檚 Class 1 NICs percentage rate.

Where, at the time a payment or benefit is received by the worker, the amount of earnings paid by the MSC to the worker is less than the employer鈥檚 earnings threshold at that date point.

The DEP is equal to: ((y-(a-x))*100/(100+b))+(a-x), where:

• x = Earnings to date
• y = The amount at Step Three
• a = The Employer鈥檚 Class 1 NICs earnings threshold at the date the payment or benefit is received by the worker
• b = The Employer鈥檚 Class 1 NICs percentage rate

Example 1

Ms G is a worker whose MSC makes a payment of 拢300 to her in week 1 of the 2007 to 2008 tax Year. The MSC also pays earnings from employment of 拢110, and these have been subject to PAYE. This produces the following figures:

• x = Earnings to date of 110
• y = The amount at Step Three, which is 300
• a = The Employer鈥檚 Class 1 NICs earnings threshold at the date the payment or benefit is received by the worker, which is 100
• b = The Employer鈥檚 Class 1 NICs percentage rate, which is 12.8%

As the earnings of Ms G in Week 1 are greater than the Week 1 Employer鈥檚 Class 1 NICs earnings threshold, the whole of the amount at Step 3 is subject to Employer鈥檚 Class 1 NICs.

By applying the formula 100/ (100+b) (where b is the Employer鈥檚 Class 1 NICs percentage rate), we can establish that the DEP is equal to:

1. The amount from Step 3 (拢300), multiplied by
2. 100/ (100+12.8)
3. The result is the amount of the deemed employment payment, 拢265.96
4. The amount of Employer鈥檚 Class 1 NICs is 拢34.04, which is the difference between the amount at Step 3, 拢300, and the DEP of 拢265.96.

Example 2

Using the same example as above, however this time Ms G receives no earnings from employment. The only payment received is 拢300, and this has not been treated as earnings from employment

• x = Earnings to date of 0
• y = The amount at Step Three, which is 300
• a = The Employer鈥檚 Class 1 NICs earnings threshold at the date the payment or benefit is received by the worker, which is 100
• b = The Employer鈥檚 Class 1 NICs percentage rate, which is 12.8%

Ms G鈥檚 earnings in Week 1 are less than the Week 1 Employer鈥檚 Class 1 NICs earnings threshold, as she has received no earnings from employment. An element of the amount at Step 3 will therefore not be subject to Employer鈥檚 Class 1 NICs.

We must use the formula ((y-(a-x)) x 100/ (100+b)) + (a-x):

1. ((300-(100-0))*100/ (100+12.8)) + (100-0)
2. ((300-100)*(100/112.8)) +100
3. The result of DEP Employment Payment
4. The Employer Class 1 NICs is 拢22.70, which is the difference between the amount at Step 3 (拢300) and the amount of the DEP of 拢277.30.