What is a Notional payment/deduction?
A Notional Payment allows you to increase the employee’s NIable or Taxable gross without giving an addition to pay. After Tax but Before NI – increases an employee’s NIable Gross Pay. After calculating NI on the increased gross pay an after-tax deduction is automatically made for the same amount. In this way an employee can pay extra NI without receiving extra pay. After NI but Before Tax – this does the same as above except that the code affects Taxable gross pay.
