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12.2.2.51 March 2013
How to calculate take home pay
Step 1
Calculate monthly pay (Box A divided by 12)
Box J
Step 2
Calculate tax per month (Box H divided by 12)
Box K
Step 3
Calculate monthly national insurance in the following way on the pay in Box J
(See 12.11.0.12. National insurance contribution rates and earnings limits)
National insurance (monthly)
Contracted in - £0 to £646.00 @ 0%
£646.01 to £3,454.00 @ 12%
over £3,454.00 @ 2%
Contracted out - £0 to £646.00 @ 0%
£646.01 to £3,337.00 @ 10.6%
£3,337.01 to £3,454.00 @ 12%
over £3,454.00 @ 2%
National insurance contributions due
Box L
Step 4 Deductions from gross monthly pay
Tax (Box K)
NI contributions (Box L)
Contributions to an occupational pension
(Box B divided by 12)
Union subscriptions
Other (eg payroll giving, loan from employer)
Total deductions
Box M
Monthly take home pay Box J minus Box M gives
Box N
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