Add employer NI incidence (#961)

* Add renames and employer NI logic

* Add employer NI logic

* Bump version

* Bump version

* Fix employer cost logic for emp_income < threshold

* Remove debugging line

CHANGELOG.md

@@ -5,6 +5,12 @@ All notable changes to this project will be documented in this file.
 The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/), 
 and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
 
+## [2.2.0] - 2024-10-16 11:52:07
+
+### Fixed
+
+- Add employer NI incidence.
+
 ## [2.1.1] - 2024-09-18 11:12:23
 
 ## [2.1.0] - 2024-09-18 11:04:12
@@ -1488,6 +1494,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 
 
+[2.2.0]: https://github.com/PolicyEngine/openfisca-uk/compare/2.1.1...2.2.0
 [2.1.1]: https://github.com/PolicyEngine/openfisca-uk/compare/2.1.0...2.1.1
 [2.1.0]: https://github.com/PolicyEngine/openfisca-uk/compare/2.0.0...2.1.0
 [2.0.0]: https://github.com/PolicyEngine/openfisca-uk/compare/1.8.0...2.0.0

changelog.yaml

@@ -1249,3 +1249,8 @@
     removed:
     - Survey-Enhance as a dependency.
   date: 2024-09-18 11:12:23
+- bump: minor
+  changes:
+    fixed:
+    - Add employer NI incidence.
+  date: 2024-10-16 11:52:07

changelog_entry.yaml

@@ -1,4 +0,0 @@
-- bump: minor
-  changes:
-    fixed:
-    - Set the Winter Fuel Allowance to only true in FY24-25.

emp_ni_test.ipynb

@@ -0,0 +1,67 @@
+{
+ "cells": [
+  {
+   "cell_type": "code",
+   "execution_count": 1,
+   "metadata": {},
+   "outputs": [],
+   "source": [
+    "from policyengine_uk import Simulation\n",
+    "from policyengine_core.reforms import Reform\n",
+    "\n",
+    "Reform.from_dict({\n",
+    "    \"gov.hmrc.national_insurance.class_1.rates.employer\": {\n",
+    "        \"year:2025:10\": 0.148,\n",
+    "    },\n",
+    "}\n",
+    "\n",
+    "sim = Simulation(reform=), situation={\n",
+    "    \"employment_income\": {\n",
+    "        2025: 40_000,\n",
+    "    },\n",
+    "})"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": 3,
+   "metadata": {},
+   "outputs": [
+    {
+     "data": {
+      "text/plain": [
+       "array([37500.], dtype=float32)"
+      ]
+     },
+     "execution_count": 3,
+     "metadata": {},
+     "output_type": "execute_result"
+    }
+   ],
+   "source": [
+    "sim.calculate(\"employment_income\", 2025)"
+   ]
+  }
+ ],
+ "metadata": {
+  "kernelspec": {
+   "display_name": "base",
+   "language": "python",
+   "name": "python3"
+  },
+  "language_info": {
+   "codemirror_mode": {
+    "name": "ipython",
+    "version": 3
+   },
+   "file_extension": ".py",
+   "mimetype": "text/x-python",
+   "name": "python",
+   "nbconvert_exporter": "python",
+   "pygments_lexer": "ipython3",
+   "version": "3.10.14"
+  }
+ },
+ "nbformat": 4,
+ "nbformat_minor": 2
+}

employer_ni.ipynb

@@ -0,0 +1,70 @@
+{
+ "cells": [
+  {
+   "cell_type": "markdown",
+   "metadata": {},
+   "source": [
+    "# Employer NI in PolicyEngine"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": 1,
+   "metadata": {},
+   "outputs": [],
+   "source": [
+    "from policyengine_uk import Microsimulation"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": 2,
+   "metadata": {},
+   "outputs": [],
+   "source": [
+    "baseline = Microsimulation()"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": 3,
+   "metadata": {},
+   "outputs": [
+    {
+     "data": {
+      "text/plain": [
+       "0.0"
+      ]
+     },
+     "execution_count": 3,
+     "metadata": {},
+     "output_type": "execute_result"
+    }
+   ],
+   "source": [
+    "baseline.calculate(\"employee_pension_contributions\").sum() / 1e9"
+   ]
+  }
+ ],
+ "metadata": {
+  "kernelspec": {
+   "display_name": "base",
+   "language": "python",
+   "name": "python3"
+  },
+  "language_info": {
+   "codemirror_mode": {
+    "name": "ipython",
+    "version": 3
+   },
+   "file_extension": ".py",
+   "mimetype": "text/x-python",
+   "name": "python",
+   "nbconvert_exporter": "python",
+   "pygments_lexer": "ipython3",
+   "version": "3.10.14"
+  }
+ },
+ "nbformat": 4,
+ "nbformat_minor": 2
+}

employer_ni_example.ipynb

@@ -0,0 +1,132 @@
+{
+ "cells": [
+  {
+   "cell_type": "code",
+   "execution_count": 58,
+   "metadata": {},
+   "outputs": [],
+   "source": [
+    "from policyengine_uk import Simulation\n",
+    "from policyengine_core.reforms import Reform\n",
+    "\n",
+    "\n",
+    "def get_employer_cost(employment_income, ni_rate, ni_threshold):\n",
+    "    return employment_income + ni_rate * (employment_income - ni_threshold)\n",
+    "    raise_emp_ni = Reform.from_dict(\n",
+    "        {\n",
+    "            \"gov.hmrc.national_insurance.class_1.rates.employer\": {\n",
+    "                \"2025-01-01.2030-01-01\": ni_rate\n",
+    "            },\n",
+    "            \"gov.hmrc.national_insurance.class_1.thresholds.secondary_threshold\": {\n",
+    "                \"2025-01-01.2030-01-01\": ni_threshold\n",
+    "            },\n",
+    "        }\n",
+    "    )\n",
+    "\n",
+    "    raised_ni_simulation = Simulation(\n",
+    "        situation={\n",
+    "            \"employment_income\": employment_income,\n",
+    "        },\n",
+    "        reform=raise_emp_ni,\n",
+    "    )\n",
+    "\n",
+    "    # return employment_income + raised_ni_simulation.calculate(\"ni_employer\", 2025)[0]"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": 71,
+   "metadata": {},
+   "outputs": [
+    {
+     "data": {
+      "text/plain": [
+       "45495.47096412556"
+      ]
+     },
+     "execution_count": 71,
+     "metadata": {},
+     "output_type": "execute_result"
+    }
+   ],
+   "source": [
+    "from policyengine_uk.system import system\n",
+    "\n",
+    "parameters = system.parameters(2025).gov.hmrc.national_insurance\n",
+    "\n",
+    "RATE = parameters.class_1.rates.employer  # 13.8%\n",
+    "THRESHOLD = parameters.class_1.thresholds.secondary_threshold  # 9100\n",
+    "\n",
+    "\n",
+    "def get_new_i(cost, rate, threshold):\n",
+    "    return (cost + rate * threshold) / (1 + rate)\n",
+    "\n",
+    "\n",
+    "baseline_emp_cost = get_employer_cost(40_000, RATE, THRESHOLD)\n",
+    "baseline_emp_cost"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": 72,
+   "metadata": {},
+   "outputs": [
+    {
+     "data": {
+      "text/plain": [
+       "39584.463443166314"
+      ]
+     },
+     "execution_count": 72,
+     "metadata": {},
+     "output_type": "execute_result"
+    }
+   ],
+   "source": [
+    "new_i = get_new_i(baseline_emp_cost, 0.15, THRESHOLD)\n",
+    "new_i"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": 73,
+   "metadata": {},
+   "outputs": [
+    {
+     "data": {
+      "text/plain": [
+       "45495.47096412557"
+      ]
+     },
+     "execution_count": 73,
+     "metadata": {},
+     "output_type": "execute_result"
+    }
+   ],
+   "source": [
+    "get_employer_cost(new_i, 0.15, THRESHOLD)"
+   ]
+  }
+ ],
+ "metadata": {
+  "kernelspec": {
+   "display_name": "base",
+   "language": "python",
+   "name": "python3"
+  },
+  "language_info": {
+   "codemirror_mode": {
+    "name": "ipython",
+    "version": 3
+   },
+   "file_extension": ".py",
+   "mimetype": "text/x-python",
+   "name": "python",
+   "nbconvert_exporter": "python",
+   "pygments_lexer": "ipython3",
+   "version": "3.10.14"
+  }
+ },
+ "nbformat": 4,
+ "nbformat_minor": 2
+}

policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/README.md

@@ -0,0 +1 @@
+# Employer NI

policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/employee_incidence.yaml

@@ -0,0 +1,6 @@
+description: Assume that employers keep employment costs constant in response to employer NI changes.
+values:
+  2010-01-01: true
+metadata:
+  label: Employer NI employee incidence
+  unit: bool

policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/exempt_employer_pension_contributions.yaml

@@ -0,0 +1,6 @@
+description: Whether to exempt employer pension contributions from employer NI.
+values:
+  2010-01-01: true
+metadata:
+  unit: bool
+  label: exempt employer pension contributions from employers' NI

policyengine_uk/parameters/gov/hmrc/income_tax/income_tax_additions.yaml

@@ -8,4 +8,4 @@ values:
   - savings_income_tax
   - dividend_income_tax
   - CB_HITC
-  - private_pension_contributions_tax
+  - personal_pension_contributions_tax

policyengine_uk/parameters/gov/hmrc/pensions/pensions_programs.yaml

@@ -1,8 +1,8 @@
 description: Pensions programs
 values:
   0000-01-01:
-    - private_pension_contributions
-    - occupational_pension_contributions
+    - personal_pension_contributions
+    - employee_pension_contributions
 
 metadata:
   unit: list

policyengine_uk/tests/policy/baseline/finance/benefit/family/universal_credit.yaml

@@ -6,7 +6,7 @@
       person:
         age: 30
         employment_income: 30_000
-        private_pension_contributions: 1_000
+        personal_pension_contributions: 1_000
         weekly_hours: 20
     benunits:
       benunit:
@@ -30,7 +30,7 @@
       person:
         age: 30
         employment_income: 3_000
-        private_pension_contributions: 1_000
+        personal_pension_contributions: 1_000
         weekly_hours: 20
     benunits:
       benunit:
@@ -85,7 +85,7 @@
         age: 20
         weekly_hours: 25
         employment_income: 12_000
-        private_pension_contributions: 57
+        personal_pension_contributions: 57
         dla_m: 62.55 * 52
         uc_limited_capability_for_WRA: true
       person_2:

policyengine_uk/tests/policy/baseline/gov/hmrc/income_tax/income_tax.yaml

@@ -10,6 +10,6 @@
   absolute_error_margin: 10
   input:
     employment_income: 34000
-    private_pension_contributions: 1200
+    personal_pension_contributions: 1200
   output:
     income_tax: (34000 - 1200 - 12500) * 0.2