Using the Correct NI Letter

When calculating National Insurance Contributions, it is important to select the correct NI Category Letter.

The PayRun.io API includes a special pre-calculation rule to ensure the correct letter is selected.

By default, the pre-calculation rule ("NiSetExpectedLetterRule") will automatically override any NI Category Letter that does not match the expected letter.

This rule behaviour can be disabled, using the techiques described in the pre-calculation rule page.

Manually selecting the correct NI Category Letter

The following process flow chart can be used to identify the correct NI Category Letter for a given employee. Using the employee age and flag options, it is posible to determine the category letter to be used.

Start Is m arked as " Not Liable "? Employee age and NIC liability flags NI Letter " X " Is employee " Deceased "? Is employee Under 16 ? Has reached state retirement age ? NI Letter " C " Is apprentice under 25 ? NI Letter " H " End Is employee under 21 ? Has other niable job ? NI Letter " Z " NI Letter " M " Yes Yes Yes No No No Yes No Yes No Yes Yes No Has other niable job ? NI Letter " J " Is female & entitled to reduced NI ? NI Letter " B " No Yes NI Letter " A " No Yes No NIC Liability Flag Options : Has Other Job Is Female Entitled To Reduced Rate Is Not Liable Is Fully Liable Is Apprentice

NI Liability Flags

The PayRun.io API includes some special flag options that can be used to control the NI Category Letter. The flag values are set against the employee prior to the pay run calculation process.

Flag Options

  • Is Fully Liable
    The employee is fully liable for National Insurance contributions.
  • Has Other Job
    Employee can defer National Insurance because they’re already paying it in another job.
  • Is Female Entitled To Reduced Rate
    For married women and widows entitled to pay reduced National Insurance.
  • Is Not Liable
    The employee is exempt from paying National Insurance contributions.
  • Is Apprentice
    The employee is working via an apprenticship scheme

Setting NI Liability Flags on the Employee

You can set liability flags on the Employee using a PATCH request.

curl -X PATCH \
  'https://api.test.payrun.io/Employer/ER001/Employee/EE001' \
  -H 'Accept: application/xml' \
  -H 'Api-Version: default' \
  -H 'Authorization: {OAuthHeader}' \
  -H 'Cache-Control: no-cache' \
  -H 'Content-type: application/xml' \
  -d '<?xml version="1.0"?>
<Employee xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
    <EffectiveDate>2017-04-30</EffectiveDate>
    <NicLiability>HasOtherJob IsFemaleEntitledToReducedRate</NicLiability>
</Employee>'

curl -X PATCH \
  'https://api.test.payrun.io/Employer/ER001/Employee/EE001' \
  -H 'Accept: application/json' \
  -H 'Api-Version: default' \
  -H 'Authorization: {OAuthHeader}' \
  -H 'Cache-Control: no-cache' \
  -H 'Content-type: application/json' \
  -d '{
  "Employee": {
    "EffectiveDate": "2017-04-30",
	"NicLiability": "HasOtherJob IsFemaleEntitledToReducedRate"
  }
}'