NIC payments, anyone got a "ready reckoner"

[Arab]

Relatively new to contracting but happy I know the basics ref PAYE/Dividends/corp tax et al. However, when it comes to NIC I genuinely feel I might have a part of my brain missing.

As the sole director of my ltd company, I am paying Director's NIC, plus of course the company is paying Employer's NIC as well. What I would love someone to guide me on here is basically is there a way to work out approximately how much each will be for my current year so I can set aside along with corporate tax? Paying myself a salary of £20,000 PA. Basic tax code. Can't think of anything else pertinent but happy to oblige if anything required.

I've recently started paying salary weekly, with quarterly dividend payments. Accountant sent through this week's pay slip and it has Employee's NIC contribution for one week of £46.16 and 53.08 Employers' NIC. So basically around £100 a week, for 52 weeks....seriously, more than 25% of my annual salary on NIC? Can that be right?

Thanks for any help offered!

[northernladuk]

Sorry to sound unhelpful but hav you asked your accountant to explain it? He knows your situation much better than we do and you are paying him for this advice. See what he says and then come ask a question if you dont think he is right?

[Greg@CapitalCity]

Yep, his calculation is correct, but it may have been applied incorrectly. For a Director;
(1) National Insurance is calculated based on total cumulative pay to date;
(2) When salary exceeds the Secondary Threshold (7,488) NIC becomes payable by the employer;
(2) When salary exceeds the Primary Threshold (7,605) NIC becomes payable by the employee;

So if you have already paid yourself over £7,605 in salary from your company, then the deductions for NIC you mention above are correct. Overall, on £20,000 of salary paid over a full tax year you would pay a total of £3,219 in employers and employees NIC.

As northernladuk say, you should consider dropping your salary (to as low as £7,488 per year). The saving in tax/NIC will be surprising.....

[northernladuk]

..which, judging by his other post will have his accountants head spinning round with steam coming out of his ears when he suggests it!!!