Roundings in the calculations NI

animacs

I have noticed that sometimes they round the calculations up, sometimes down, I can't see any logic in them. For me, e.g. 26.6198 is 26.62, but for them is 26.61.
The book says (payroll, level 2, DNP) that in case of NI, "you must round each calculation to the neares 1 p. amounts of 0.5 should be rounded down."
well, for me it means, that e.g. 6.9183 would be 6.92 pence, however, they say it is 6.91 (this was the last exam's answer, in December).
does it mean I have to round the NI calculations always DOWN?

payrollpro

That's a really good question and there is no simple answer.

Generally NI calculations are rounded in the same way as income tax, if it is a value which benefits the taxpayer you round it to their benefit. You are right, the absolutely technically correct way of rounding NI is to do it logically and follow strict mathematical rules, however, if there is an adjustment to the NI, say deduction for contracted out rebate, you would round that up in order to give the full benefit to the employee. To do otherwise would mean sometimes taking 1p more than the employee is legally liable to pay and that is as unlawful and as big a no no as not paying enough.

What you have outlined is an example of how even examiners can get it wrong but I suspect there were no penalties applied for something like that, hey not even the AAT can be that picky, can they?

Payrollpro

animacs

ok, thanks. I hope, they will not be that picky. it is just i could not see any logics in it.