I've just completed payroll paying myself £1047.50 for the month so I am under the tax and NI threshold. I have still had NI taken off as an employee. How do I fix this?

Certain criteria must be met to determine if National Insurance (NI) contributions should be deducted, Andy. Allow me to assist you in determining your eligibility for this.

Before we begin, could you please confirm if you are the company director? This will help us provide you with detailed information regarding the tax and NI threshold deductions based on your payroll.

If you are a company director, please note that directors are classed as employees and pay National Insurance (NI) on annual income from salary and bonuses over £12,570, which translates to approximately £1,047.50 per month. Therefore, if your monthly pay falls exactly at or exceeds that threshold, your NI contributions are calculated on this basis.

If not, based on the current rates and allowances for NI contributions, your monthly salary qualifies for NI deductions on the employer's side since your earnings exceed the threshold of £758 per month.

However, on the employee's side, NI shouldn't be taken off as your salary of £1047.50 is below the employee threshold of £823 per month.

Given that NI has been deducted from your employee side, please review your tax and NI details in your payroll setup to ensure that the correct categories and settings are selected.

If you are using standard payroll, you can follow these steps:

1. Go to Payroll and select Employees.
2. Select the employee.
3. Navigate Tax information and click edit icon.
   

    

4. Review and apply the correct categories in NI letter.
   
5. Hit Save.

If you are using advance payroll, you can follow these steps:

1. Go to Payroll and select Employees.
2. Select the employee.
3. Click Tax and NI Details.
   
4. Review and apply the correct categories in National Insurance category.
5. Hit Save.

If everything appears to be correctly set up, also ensure there hasn't been another payroll run for your name within the same month, as this might cause the accumulated amount to exceed the threshold, leading to NI deductions. To verify this, you can run a detailed payroll report to check if there are additional payroll entries under your name for the same month.

You can read this article to understand about the company directors in QuickBooks:

• Managing company directors in QuickBooks Online Core Payroll.
• National Insurance for company directors.

Additionally, I've included information to assist you in accessing and running various payroll reports in QuickBooks. These reports will give you valuable insights into your business's financial health and detailed information about your employees: Run payroll reports in QuickBooks Online Advanced Payroll.

We are here to assist you in ensuring that your payroll settings and categories are correctly aligned, and that no additional payroll entries are impacting your deductions. If you require further assistance or have any questions, please do not hesitate to reach out. We are committed to providing prompt responses.