NI deductions

[rapsberry]

I made my wife a secretary of my Ltd from 1 August 2020 and set her monthly salary to £1,200 assuming that her total compensation for 2020/2021 year will be £1,200 * 8 = £9,600. Based on my understanding, she will have to pay 12% (NI contribution) from £100 for the whole period.
I'm looking at her payroll for the August 2020 and a bit confused with the calculations. It says:

Total Pay: 	£1,200.00
Tax Code: 	1250L	
Tax: 		£0.00	
Employee NI	£48.96	
Net Pay		£1,151.04	
Employer NI	£64.58

Could you suggest if my understanding is wrong and those numbers are correct? I would appreciate if someone explains how those numbers were calculated.

I tried to get an explanation from the accountant, but the guy doesn't bother to answer all my question, so I have to follow up each response and then wait a day to get his reply.

[ladymuck]

NI is based on the earnings in the current period. It isn't cumulative like income tax.

Here's a layman's guide
How much Income Tax and National Insurance you should pay - Money Advice Service

[Lance]

I tried to get an explanation from the accountant, but the guy doesn't bother to answer all my question, so I have to follow up each response and then wait a day to get his reply.

Have you got a telephone?
If yes....Try it.

[piebaps]

Ni data is here National Insurance: How much you pay - GOV.UK

You pay 12% on anything earned between £792 and £4167 per month.

Her earnings are £1200. Take away £792 and you're left with £408 which at 12% is £48.96.

No idea what an accountant would charge you for that, how about we call it a tenner?

[ladymuck]

Ni data is here National Insurance: How much you pay - GOV.UK

You pay 12% on anything earned between £792 and £4167 per month.

Her earnings are £1200. Take away £792 and you're left with £408 which at 12% is £48.96.

No idea what an accountant would charge you for that, how about we call it a tenner?

That's employee's NI.

You forgot to add the employer's NI

[eek]

So missing facts people haven't 100% covered.

NI payments are as Ladymuck states periodic unless the employee is a company director and the appropriate field has been ticked.

Employee deductions are removed from the amount you pay your wife but the company pays employer NI contributions itself.

There should be a £3000 allowance your company can use to offset the Employer (Class 1 secondary NICs) contributions so you don't actually need to worry about that bit.

[ladymuck]

So missing facts people haven't 100% covered.

NI payments are as Ladymuck states periodic unless the employee is a company director and the appropriate field has been ticked.

Employee deductions are removed from the amount you pay your wife but the company pays employer NI contributions itself.

There should be a £3000 allowance your company can use to offset the Employer (Class 1 secondary NICs) contributions so you don't actually need to worry about that bit.

Need to check eligibility for the allowance as the rules changed on that, and it's now £4,000. Looks like the OP would be eligible so the box needs to be ticked on their FPS/EPS

Employment Allowance: Check if you're eligible - GOV.UK

[piebaps]

That's employee's NI.

You forgot to add the employer's NI

The OP didn't ask about Employers - although on reflection, given the question, he or she is probably unaware of the difference.