Home › Employers › Deduction from earnings orders › Example 2 - Current scheme
Example 2 - Current scheme
Current Scheme - National Insurance number used as reference
Full deduction cannot be taken in pay period
First Week
The employee’s net earnings are temporarily reduced to £120 a week. The deduction rate is £32 a week, and the protected earnings proportion is £96.
Net earnings £120
Less the protected earnings proportion £96
Leaves £24
Send us £24
You may keep up to £1 for administrative charges. This amount is in addition to the deduction from earnings order even though it reduces the liable person’s income below the protected earnings proportion. The shortfall of £8 is carried forward to next pay period.
In any period when there are not enough net earnings for the full deduction to be taken, you should carry forward the shortfall. You should add to the deduction to be taken for the next pay period.
However, there may be cases where the shortfall is carried forward for several weeks before being repaid. You will need to keep a record of any ongoing shortfall.
Second Week
The employee’s net earnings are £160 this week. The protected earnings proportion is £96 and the normal deduction is £32.
Net earnings £160
Less the protected earnings proportion £96
Leaves £64
Send us £40
(£32 + £8 shortfall)
You may keep up to £1 towards your administrative costs. This amount is in addition to the deduction from earnings order.
Page top
