PART 2 ASSESSMENT OF EARNINGS RELATED CONTRIBUTIONS
Prescribed equivalents11
1
The prescribed equivalents of the lower and upper earnings limits and the primary and secondary thresholds, for the purposes of—
a
sections 6(1), 6A(1), 8(1), and 9(1) of the Act (which provide liability for Class 1 contributions, notional payment of primary Class 1 contribution where earnings are not less than the lower earnings limit, the calculation of primary Class 1 contributions and the calculation of secondary Class 1 contributions respectively) F1; and
b
sections 41(1) and 42A(1) of the Pensions Act (reduced rates of Class 1 contributions and rebates F2,
shall be determined in accordance with paragraphs (2) to (5).
2
Subject to paragraphs (4) and (5), the prescribed equivalents of the lower and upper earnings limits shall be—
a
where the earnings period is a multiple of a week, the amounts calculated by multiplying the lower and upper earnings limits (“the weekly limits”) by the corresponding multiple;
b
where the earnings period is a month, the amounts calculated by multiplying each of the weekly limits by 4 1/3;
c
where the earnings period is a multiple of a month, the amounts calculated by multiplying each of the weekly limits by 4 1/3 and multiplying each result by the corresponding multiple;
d
in any other case, the amounts calculated by dividing each of the weekly limits by 7 and multiplying each result by the number of days in the earnings period concerned.
3
Subject to paragraphs (4) and (5), the prescribed equivalents of the primary and secondary thresholds shall be—
a
where the earnings period is a month, F3£385 ;
b
where the earnings period is a year, F4£4,615 ;
c
where the earnings period is a multiple of a week, the amount calculated by dividing the figure in sub-paragraph (b) by 52 and multiplying the result by the corresponding multiple;
d
where the earnings period is a multiple of a month, the amount calculated by dividing the figure in sub-paragraph (b) by 12 and multiplying the result by the corresponding multiple;
e
in any other case, the amount calculated by dividing the figure in sub-paragraph (b) by 365 and multiplying the result by the number of days in the earnings period concerned.
4
The amounts determined in accordance with paragraph (2)(b) and (c) and paragraph (3)(c) and (d) if not whole pounds, shall be rounded up to the next whole pound.
5
The amounts determined in accordance with paragraph (2)(d) and paragraph (3)(e) shall be calculated to the nearest penny, and any amount of a halfpenny or less shall be disregarded.