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Post Info TOPIC: Holiday pay exempt from NI?
Noola


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Holiday pay exempt from NI?
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I've noticed in one of our client payrolls that sometimes employees pay doesn't have NIC deducted when its processed as a holiday.

When trying to process the two weeks over Christmas as holiday pay there are no NIC contributions and I can't find any confirmation in the payroll records of any scheme in place.

Are there holiday schemes which allow this? I have trawled the HMRC website and the internet but there seems to be no information on this.

I don't want to ask the client just yet if there is a scheme in place as they will probably think we should have this information already.

I've also noticed that when I have processed a few employees holiday pay it has taken NI from them when it shouldn't have. How would you correct this?



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Don Tax


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Hi Kay,

It might be that when you notice zero NI deducted, you are looking at the gross pay on the payslip rather than the pay for that week alone. EG. The gross is split over three weeks and none of them are higher than the primary threshold.

See Method A and B here:-

http://www.hmrc.gov.uk/paye/payroll/special-pay/holiday.htm

Regards,
Tim



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Tom McClelland


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At one time there was an NI concession for holiday pay for employees in the building trade. I don't know if this still applies.

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Noola


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Thanks Tom. Thats what it was. It ended in October. Theres so many schemes in place its hard to keep up with them all!

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