Employee NI Details

Owned by Mark Holland (Unlicensed)
Last updated: Jan 31, 2018
7 min read

Description

The first tab (NI Details) is used to add, update and delete the employee's National Insurance record. The current NI record is shown after selecting an employee and is emboldened in the Employee NI History list. The second tab (NI Payments) displays the contributions and levels for the tax year. The screen also gives the ability to recalculate previous periods NI by choosing a different NI Table Letter.

Contents

NI Details

What is Non-Cumulative NI?

Restrictions

NI Payments

Delete Current Period Movements

Director

NI Movement Scenarios

NI Details

  • Date Of Change: Indicates the date at which the employee NI details are valid from. For entry of a new NI record the date of change should be after the pay date of the last period.
  • NI Number: Indicates the employee’s NI number.
  • NI Table Letter: Indicates the employee’s NI Table Letter. Available NI Table letters are set out in legislation.
  • Director: Indicates whether or not this employee is a director for NI purposes.
  • Non-Cumulative NI: If the employee's NI will be deducted on a weekly/monthly (pay period) basis. Visible only when Director is checked.
  • Director Start Date: Indicates the date at which the employee became a director. Entry of this field is mandatory if the employee is a director.

What is Non-Cumulative NI?

With effect from 6th April 1999, Directors NICs can be deducted on a weekly/monthly (pay period) basis with the annual calculation being completed at the end of the tax year to confirm that the correct amount has been paid. Any subsequent amendments should then be made. Also, if a Director leaves during the tax year the cumulative calculation should be made to ensure that all NICs at that point have been paid in accordance with Directors NIC calculation rules.

Restrictions

  • An NI record cannot be edited if it's start date is in a previous period, unless the worker has never been paid
  • If a worker has been paid as a standard director in the year a non director record cannot be entered
  • If a worker has been paid as a standard director in the year a non cumulative director record cannot be entered
  • A new record cannot be added if the date is prior to the workers last pay date.
  • Where a worker has been paid as a director in the year, a director can only be added if the director start date is later than the last pay date.

NI Payments

Upon clicking on the NI Payments tab the above screen will be displayed. This displays the NI Payments made in the current tax year by period. Use this section to change the NI Letter of a period in this tax year.


  • Start Date: The date that the change will start from. This must be from the current tax year.
  • End Date: The date that the change will end. This must be from the current tax year.
  • NI Table Letter: The new employee'e NI Table Letter. Available NI Table letters are set out in legislation.

By entering the above and clicking update, the NI Payments Table section will show the results of the change and you will be prompted to confirm your changes. Confirming the changes will save the new data. Canceling will revert the table to it's previous state. If any changes have been made in a period it will be highlighted.

Upon clicking save the NI Levels will be moved between letters in the YTD NI Balances screen (which contain the opening balances for the current period).

Any changes that have been made to the NI Payments in the current tax year can be seen in the NI Movements section at the bottom of the screen (see below). The rows in this table will be highlighted if they are applied in the current period.

Delete Current Period Movements

Where movements have been made, the user has the opportunity to delete movements in the current period at anytime prior to the committing the payroll by clicking this button. This will revert all changes both on the NI Payments screen and in the Pay -> YTD Balances (NI Balances) screen.

Director

The screen display and functionality will behave differently if the worker is a Director and the Non Cumulative flag is not ticked*. Only the niable pay will be moved and the pay will automatically recalculate in the current period.

* if the Non Cumulative flag is ticked the screen will behave as it would for a standard worker.


NI Movement Scenarios

  • What Will Happen If I Roll The Payroll Back?

InPay will not allow the payroll to be rolled back if any NI movements exist in the current period. The user will be informed of the effected workers and requested to delete the movements prior to roll back 

  • Change Director Status

Very occasionally a worker will have been set up and have committed pay periods calculated in the financial year with the incorrect director status set. If this occurs the the YTD NI balances must be recalculated outside of InPay. The levels (toLEL etc) then need updating in the Pay -> YTD Balances screen (NI Balances Tab), while any difference in the employee and employer contributions should be added to the current period's payment via a statutory override.

Users should be aware that NI balances are stored by NI Letter and by director status and must ensure that the values stored against all statuses are correct. Examples of the 6 possible scenarios are shown below. Once the steps below have been followed the user should contact the help desk and request that a new NI record with a different director status be entered for them.

  • Example 1 - A worker has been set up as an employee and should be a director (cumulative)

Figure 1: Shows the opening balances stored against an employee


Figure 2: Shows the balances against the employee after they have been manually set to zero (Please note zero balances are hidden)


Figure 3: Shows the balances added to the director having manually been recalculated outside of the system. In the case of moving to a director (cumulative) the NI contributions will be recalculated automatically in the current period. Therefore there is no requirement for a statutory override.

  • Example 2 - A worker has been set up as an employee and should be a director (non cumulative)

The data against the employee should be zeroed as per figures 1 and 2 of the previous example


Figure 4: Shows the balances re-added against the director, because a non cumulative director is calculated the same as an employee there is no requirement for a statutory override.

  • Example 3 - A worker has been set up as a director (non cumulative) but should be an employee

This should be actioned exactly the same way as example 2 but taking the balances from the director and adding to the employee

  • Example 4 - A worker has been set up as a director (non cumulative) but should be a director (cumulative)

This should be actioned exactly the same way as Example 1 except the balances removed will have the directors flag ticked

  • Example 5 - A worker has been set up as a director but should be an employee

Figure 3 shows the initial state. These balances should be zeroed (Figure 2)


Figure 5: Shows the balances re-added against the employee


Figure 6: Shows the initial payslip for the next period


Figure 7: Shows the adding of the statutory override EENI is 357.66 (this period) + 434.61 (previously underpaid) and ERNI is 458.72(this period) + 989.67 (previously underpaid)


Figure 8: Shows the resultant payslip

  • Example 6 - A worker has been set up as a director (cumulative) but should be a director (non cumulative)

This example is exactly the same as 5 with the exception that the new balances are stored with the directors flag tick.