EXPT REVISION PAPER - Suggested answers TASK 1 Gross Pay Calculator p Monthly Salary 3650 00 Daily Salary 3650 22 165 91 Adjustments to Pay ( + or -) Bonus 500 00 Statutory Payments Gross pay for pay period 4150 00 Cumulative gross pay 4150 00 Voluntary Deductions Employee s Pension due for Pay Period 3% 4150 124 50 Employee s AVC due for Pay Period Charitable Giving due for Pay Period 10 00 Employee s Cumulative pension year to date 124 50 Employee s Cumulative AVC year to date Cumulative Charitable Giving year to date 10 00 Employer Contributions Employer s Pension due for month 3% 124 50 Employer s Cumulative Pension - year to date 124 50 Tax Allowable Deductions GAYE 10 00 Total Tax Allowable Deductions 10 00 1
Tax code used 1060 Pay Period 1 p Cumulative gross pay 4150 00 Less cumulative allowable deductions 10 00 Cumulative pay for tax purposes 4140 00 Pay adjustment (884 09) Cumulative taxable pay 3255 91 Tax calculation 2649 @ 20% 529 85 2755-2649 = 606 @ 40% 242 40 Cumulative tax due 772 25 Tax due for month 772 25 Rounding Rules for National Insurance Calculations Only If the third decimal place is equal to or greater than 6, round up, otherwise round down. National Insurance Calculations p NI table letter used A Gross Pay for NIC 4150 00 Employee Calculations Earnings Up to Lower Earnings Limit 486 Nil Earnings from LEL to PT 186 0% Earnings Bands % Calculation NI Payable Earnings from PT to UAP 2665 12% 319 80 Earnings from UAP to UEL 195 12% 23 40 Earnings above UEL 618 2% 12 36 Rebate (If applicable) Total NI Contributions 355 56 Cumulative Employee NI Contributions 355 56 Employer Calculations Earnings Bands Earnings Up to Lower Earnings Limit 486 Nil Earnings from LEL to ST 190 0% % Calculation NI Payable Earnings from ST to UAP 2661 13.8% 367 22 Earnings from UAP to UEL 195 13.8% 26 91 Earnings above UEL 618 13.8% 85 28 Rebate (If applicable) Total Employer NI Contributions 479 41 Cumulative Employer NI Contributions 479 41 2
Payslip Employee Graham Watkins Date 30/04/15 Payments Deductions Cumulative : p : p : p Basic pay: 3650 00 Income Tax: 772 25 Gross pay: 4150 00 Overtime: NIC: 355 56 Pay for Tax purposes: 4140 00 Bonus: 500 00 Pension: 124 50 Tax: 772 25 SMP: AVC: Employees NIC: 355 56 SSP: Charitable Giving: 10 00 Employers NIC: 479 41 SPP: Loan Employee Pension (Inc AVCs): 124 50 Commission: Social Club Employer Pension 124 50 Arrears: AEO Charitable Giving: 10 00 Admin Fee Student Loan Total Gross Pay: 4150 00 Total Deductions: 1262 31 Net pay: 2887 69 NI Number: JD987234D Tax code: 1060L 3
WORKINGS TASK 2 2 weeks paternity pay = 139.58 x 2 = 279.16 May 21 working days (inc Bank holiday) Daily Salary 3650 21 = 173.81 per day Deduction from pay 10 days @ 173.81 = 1738.10 Worked 11 days = 11 x 173.81 = 1911.91 Adjusted gross salary Gross Salary = 1911.91 + 279.16 = 2191.07 4
Gross Pay Calculator p Monthly Salary 3650 00 Daily Salary 3650 21 = 173.81 173 81 Adjustments to Pay ( + or -) (1738 10) Statutory Payments 279 16 Gross pay for pay period 2191 07 Cumulative gross pay 4150+2191.07 6341 07 Voluntary Deductions Employee s Pension due for Pay Period 3% 2191.07 65 73 Employee s AVC due for Pay Period Charitable Giving due for Pay Period 10 00 Employee s Cumulative pension year to date 124.50 +65.73 190 23 Employee s Cumulative AVC year to date Cumulative Charitable Giving year to date 10 + 10 20 00 Employer Contributions Employer s Pension due for month 3% 65 73 Employer s Cumulative Pension - year to date 124.50 + 65.73 190 23 Tax Allowable Deductions GAYE 20 00 Total Tax Allowable Deductions 20 00 5
Tax code used 1060L Pay Period 2 p Cumulative gross pay 6341 07 Less cumulative allowable deductions 20 00 Cumulative pay for tax purposes 6321 07 Pay adjustment (1768 18) Cumulative taxable pay 4552 89 Tax calculation 4552 @ 20% 910 40 Cumulative tax due 910 40 Tax due for month 910.40 772.25 138 15 Rounding Rules for National Insurance Calculations Only If the third decimal place is equal to or greater than 6, round up, otherwise round down. National Insurance Calculations p NI table letter used A Gross Pay for NIC 2191 07 Employee Calculations Earnings Up to Lower Earnings Limit 486 Nil Earnings from LEL to PT 186 0% Earnings Bands % Calculation NI Payable Earnings from PT to UAP 1519.07 12% 182 29 Earnings from UAP to UEL Earnings above UEL Rebate (If applicable) Total NI Contributions 182 29 Cumulative Employee NI Contributions 182.29 + 355.56 537 85 Employer Calculations Earnings Bands Earnings Up to Lower Earnings Limit 486 Nil Earnings from LEL to ST 190 0% % Calculation NI Payable Earnings from ST to UAP 1515.07 13.8% 209 08 Earnings from UAP to UEL Earnings above UEL Rebate (If applicable) Total Employer NI Contributions 209 08 Cumulative Employer NI Contributions 209.08 + 479.41 688 49 6
Payslip Employee Graham Watkins Date 29/05/15 Payments Deductions Cumulative : p : p : p Basic pay: 1911 91 Income Tax: 138 15 Gross pay: 6341 07 Overtime: NIC: 182 29 Pay for Tax purposes: 6321 07 Bonus: Pension: 65 73 Tax: 910 40 SMP: AVC: Employees NIC: 537 85 SSP: Charitable Giving: 10 00 Employers NIC: 688 49 SPP: 279 16 Loan Employee Pension (Inc AVCs): 190 23 Commission: Social Club Employer Pension 190 23 Arrears: AEO Charitable Giving: 20 00 Admin Fee Student Loan Total Gross Pay: 2191 07 Total Deductions: 396 17 Net pay: 1794 90 NI Number: JD987234D Tax code: 1060L 7
Task 3 Gross Pay Calculator p Monthly Salary 3650 00 Daily Salary 3650 22 165 91 Adjustments to Pay ( + or -) Statutory Payments Gross pay for pay period 3650 00 Cumulative gross pay 3650.00 + 6341.07 9991 07 Voluntary Deductions Employee s Pension due for Pay Period 3% 3650 109 05 Employee s AVC due for Pay Period Charitable Giving due for Pay Period 10 00 Employee s Cumulative pension year to date 109.05 + 190.23 299 28 Employee s Cumulative AVC year to date Cumulative Charitable Giving year to date 30 00 Employer Contributions Employer s Pension due for month 3% 3650 109 05 Employer s Cumulative Pension - year to date 109.05 + 190.23 299 28 Tax Allowable Deductions GAYE 30 00 Total Tax Allowable Deductions 30 00 8
Tax code used K46 Pay Period 3 p Cumulative gross pay 9991 07 Less cumulative allowable deductions 30 00 Cumulative pay for tax purposes 9961 07 Pay adjustment PLUS 117 27 Cumulative taxable pay 10078 34 Tax calculation 7947 @ 20% 1589 55 10078-7947 2131@ 40% 852 40 Cumulative tax due 2441 95 Tax due for month (50% rule 3650 / 2 = 1825 OK) 2441.95-910.40 1531 55 Rounding Rules for National Insurance Calculations Only If the third decimal place is equal to or greater than 6, round up, otherwise round down. National Insurance Calculations NI table letter used A Gross Pay for NIC 3650 p Employee Calculations Earnings Up to Lower Earnings Limit 482 NIL Earnings from LEL to PT 186 0% Earnings Bands % Calculation NI Payable Earnings from PT to UAP 2665 12% 319 80 Earnings from UAP to UEL 195 12% 23 40 Earnings above UEL 118 2% 2 36 Rebate (If applicable) Total NI Contributions 345 56 Cumulative Employee NI Contributions 537.85 + 345.56 883 41 Employer Calculations Earnings Bands Earnings Up to Lower Earnings Limit 486 NIL Earnings from LEL to ST 190 0% % Calculation NI Payable Earnings from ST to UAP 2661 13.8% 367 22 Earnings from UAP to UEL 195 13.8% 26 91 Earnings above UEL 118 13.8% 16 28 Rebate (If applicable) Total Employer NI Contributions 410 41 Cumulative Employer NI Contributions 688.49 + 410.41 1098 90 9
Payslip Employee Graham Watkins Date 30/06/15 Payments Deductions Cumulative : p : p : p Basic pay: 3650 00 Income Tax: 1531 55 Gross pay: 9991 07 Overtime: NIC: 345 56 Pay for Tax purposes: 9961 07 Bonus: Pension: 109 05 Tax: 2441 95 SMP: AVC: Employees NIC: 883 41 SSP: Charitable Giving: 10 00 Employers NIC: 1098 90 SPP: Loan Employee Pension (Inc AVCs): 299 28 Commission: Social Club Employer Pension 299 28 Arrears: AEO Charitable Giving: 30 00 Admin Fee Student Loan Total Gross Pay: 3650 00 Total Deductions: 1996 16 Net pay: 1653 84 NI Number: JD987234D Tax code: K46 10
Task 4 SSP insufficient earnings must earn over LEL in order to qualify. Task 5 SMP Correct Documentation Sufficient Earnings Sufficient employment 11
Short Answer Section 1 None 2 A 3 0T W1/M1 4 A 413.00 5 C 6 C 7 A 9% 8 Sufficient earnings, Sufficient Service, Correct documentation 9 D 10 Tick appropriate section on P45 and deduct as normal from final salary 11 Contractual, In writing 12 No - need documentary proof 13 Use P45 figure 14 B 15 6.50 12