4. Deductions from monthly earnings
The following deduction rates should be used for employees being paid monthly
| Net earnings | Deduction rate (%) |
|---|---|
| Not exceeding £300 | 0 |
| Exceeding £300 but not exceeding £550 | 3 |
| Exceeding £550 but not exceeding £740 | 5 |
| Exceeding £740 but not exceeding £900 | 7 |
| Exceeding £900 but not exceeding £1420 | 12 |
| Exceeding £1420 but not exceeding £2020 | 17 |
| Exceeding £2020 | 17 in respect of the first £2020 and 50 in respect of the remainder |
Monthly intervals
If your employee is paid in monthly intervals, then their net earnings should be divided by the number of months in the pay period.
The above table should then be used to work out the appropriate monthly deduction and the resulting amount multiplied by the number of months in the period.