UK: Introduction to income tax and NICs
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Country
United Kingdom
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learning hour's
6
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Material Year
2022
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Overview
PAYE income tax and National Insurance Contributions are the largest source of remittances all employers must accurately deduct and forward to HMRC on time. Calculating these correctly is a fundamental skill for all in payroll.
Beginning with calculating gross pay and establishing the different categories of deductions, this course moves to cover in-depth the rates, thresholds and methodologies for manually calculate income tax and NICs using both manual and table methods. By the end of the day, you will be able to perform a gross to net calculation, understand the extra considerations required for calculating pay for starters and leavers and the information required on a pay statement.
This course forms part of the face-to-face delivery option for the Payroll Technician Certificate. But can also be attended as a stand-alone course.
Who is this course for?
The course is suitable for delegates that have the following suggested roles:
And you may be working in either:
This course would also suit those in HR and finance roles who require a more detailed understanding of the mechanics of PAYE and NICs than taught on the payroll for non-payroll professionals course.
What will you achieve?
To equip you with the knowledge and skills to calculate PAYE income tax and National Insurance Contributions correctly.
- Calculate gross income
- Calculate PAYE and NIC liabilities
- Handle payments for starters and leavers correctly
- Sequence the required calculations correctly
- Outline the correct process for systems output
- Calculate net pay
Course Trainers
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Fiona Smith
Before joining the CIPP as a full-time trainer in September 2019, Fiona worked in payroll in different organisations for over 9 years including her role as Assistant Group Payroll Manager for Breedon Group Services, the UK’s largest independent construction materials firm. Fiona holds the CIPP Foundation Degree in Payroll Management and the CIPD Diploma in HR Management and uses the knowledge gained in both of these within her training role to ensure that CIPP members have the information, skills and knowledge they need to keep up to date with the ever-changing payroll obligations.
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- Classifying taxable and NICable pay elements
- Calculating pay apportionments correctly
- Ascertaining what makes a deduction from pay lawful
- Classifying the three types of deductions
- Distinguishing deductions which affect taxable & NICable pay
- Overview of tax relief methods for pension contributions
- Listing the NI category letters currently in use
- Identifying the correct NI category letter for employees
- Awareness of proof required to apply certain category letters
- Recognising the names and current amounts of NIC thresholds
- Listing the current rates of NICs for each category letter
- Calculating NICs using the Exact Percentage method
- Calculating NICs using the Table method
- Identifying different tax codes
- Identifying circumstances which warrant “emergency tax codes”
- Categorising different tax codes
- Distinguishing Scottish tax codes
- Identifying the different allowances available
- Navigating through Pay Adjustment Table A
- Calculating income tax using the table method
- Calculating income tax using the manual method
- Awareness of circumstances where tax refunds may be processed
- Identifying the correct order to calculating gross to net figures
- Performing gross to net calculations
- Awareness of deadlines and eligibility for a payslip
- Outlining the minimum information required on payslips
- Mistimed payments for starters and leavers
- Payments after leaving
What will be covered?
Ascertaining gross pay :
Processing deductions:
National Insurance Categories:
Calculating National Insurance Contributions :
Calculating income tax:
Completing gross to net calculations:
Awareness of payslip obligations:
Processing starters and leavers:
Summary
PAYE income tax and National Insurance Contributions are the largest source of remittances all employers must accurately deduct and forward to HMRC on time. Calculating these correctly is a fundamental skill for all in payroll.
