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INNational Insurance
National Insurance contributions (NICs) are payments made by workers and employers that build entitlement to the State Pension and certain benefits. For employed staff the relevant type is Class 1: the employee pays a primary contribution deducted from wages, and the employer pays a secondary contribution on top of gross pay — a real cost to budget for when pricing shifts.
How it works in payroll
NICs are collected through PAYE each pay period. Contributions are only due on earnings above set thresholds, at rates set by the government — both are adjusted from time to time, usually from the start of the tax year in April, so take current figures from GOV.UK. Each employee has a National Insurance number, and payroll assigns an NI category letter that determines the rates applied — some categories give employers relief, for example for young workers and apprentices.
What shift teams should watch
Because NICs are calculated per pay period rather than annually, staff with variable hours can pay different amounts week to week — that is normal, not an error. The deduction must appear itemised on the payslip, and payroll records must be kept for HMRC.
Social Security Contributions and Benefits Act 1992 — rates and thresholds set by the government and collected by HMRC through PAYE.
Tommy gives payroll a reliable record of hours per pay period, so variable-hours staff are paid — and their deductions calculated — from real data.