If your director pays national insurance on a non-cumulative basis, based on HMRC’s guidance, their national insurance should be recalculated in the last period of the tax year, using the annual thresholds and rates. This is so that there’s no difference between a director paying their national insurance on a cumulative or non-cumulative basis.
As the main rates decreased by 2% in January 2024, the 2023–2024 tax year is more likely to cause a difference when the national insurance is recalculated in the final pay period.
Tip: As the rates decreased part-way through the tax year, for cumulative director national insurance calculations, the main rate decreased by 0.5% instead of 2%.
For a director on national insurance category A, their national insurance is calculated in March 2024 as follows;
0% on any earnings under £12,570
11.5% on earnings between £12,570 and £50,270 (maximum of £37,700)
2% on earnings over £50,270.
To check the calculation yourself, you can view the breakdown under the employee’s record, click the Payslip breakdown tab, then National insurance.
If you’ve already run your March payroll, you can get to the same page through the Reports section then Payslip breakdowns. In the top-left, from the drop-down, choose March 2024, click Payslip breakdown next to the relevant employee, then National Insurance.
You can also find the rates and thresholds on HMRC’s 2023-2024 website.