Learn how Social Security Categories are determined, and how this impacts the final calculation
The 3 Fundamental Factors for SSC Categories
There are 3 main factors that determine the correct Social Security Contributions* (SSC) Category:
- Weekly Wage
- Date of Birth
- Employment Status
In this guide, we will explain how each of these 3 factors may influence the SSC Category.
*SSC may be generally referred to as National Insurance Contributions (NI or NIC).
Weekly Wage
One of the most significant factors is the Weekly Wage.
Buddy will calculate the Weekly Wage (see: Weekly Wage Calculation).
Based on that result, automatically calculate payslips based on the eligible SSC category (see: MTCA's SSC Categories).
Date of Birth
The Date of Birth can influence which category is selected:
- Pensioners (over 65) will automatically have no SSC
- Employees under 18 would benefit from Category A instead of B, or E instead of F
- Those born before 1962 have different thresholds and rates between Category C and D
Employment Status
Lastly, employment status also affects the category.
For example, an employee set as Student would pay SSC Contributions under Category E or F (depending on their age).
Some statuses allow exemptions, such as Home Carers, where the employer is exempt from paying contributions.
The full list of available employment statuses can be found here: Table of Employment Statuses.
Understanding Calculations of Social Security
Within Buddy, you can hover over the Social Security contribution during payroll to see how the weekly rate was calculated.
Weeks Worked
In the Employee's payroll details during the Run Payroll process, you can manage the Weeks Worked to control the number of contributions:
- select weeks worked for part-time employees
- remove weeks worked for unpaid leave
When using Process Timesheets, weeks worked would be automated based on timesheets.
Why is My New Employee Paying More Weeks?
For employees engaged mid-week, the Monday is automatically defaulted to be paid, based on legislation.
If they have already paid their SSC from their previous employer for that given week, then you can untick a week to remove it from the contribution.
What happens during Unpaid Leave?
The weekly wage remains untouched. However, if the full weeks was on unpaid, the Weeks Worked will automatically adjust to lower the number of contributions.
Relevant Employee Details
To make sure your employees are paying the correct SSC, always make sure to fill in accurately:
- Employee's Date of Birth
- Employee's Salary Information
- Employee's Employment Status
- Employee's Tax Details*
*In the Tax Details, you can specify if the employee prefers to pay the minimum 10% SSC rather than the standard weekly rate for Category B only.