How do I calculate my Net Income from my Gross income?

Question

I am reasonably OK with the Income Tax, but have never got the hang of National Insurance Contributions as a PAYE tax payer.

Could someone explain?

Answer 1

Imput the gross into www.listentotaxman. It will tell you everything on a weekly, monthly, and annual basis.

Answer 2

work out you weekly wage

subtract 105 from it

multiply this by 11%

that is your NIC

Answer 3

It is worked out weekly, although there are monthly tables.  On the first £105 per week you pay nothing.  On the next £665 per week you normally pay 11%, and on all earnings above £770 per week you pay 1%.

The 11% rate is reduced to 9.6% if you happen to be a member of a "contracted out" pension scheme.  If you pay the 9.6% rate you get a lower State pension after retirement.

If you have 2 jobs you pay employee national insurance contributions on both, but if you have paid contributions by reference to more than 53 (not 52) times £770 the excess can be refunded.

Hope this helps.  It's an odd system to understand!