Abolition of employer National Insurance contributions for under 21s: examples
Published 5 December 2014
漏 Crown copyright 2014
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Before working through these examples, please read the employer guide.
The examples below use the rates that apply for the 2015 to 2016 tax year.
A monthly paid employee is under the age of 21 at the time earnings of 拢1,600 are paid. The earnings fall above both the monthly, primary and secondary thresholds but beneath the monthly Upper Earnings Limit (UEL) and Upper Secondary Threshold (UST).
| Primary | 拢1,600 - 拢672 = 拢928 x 12% | = 拢111.36 |
| Secondary | 拢1,600 - 拢676 = 拢924 x 0% | = 拢0 |
| Total NICs due | 听 | = 拢111.36 |
A monthly paid employee is under the age of 21 at the time earnings of 拢4,000 are paid. The earnings fall above the monthly UEL and UST.
| Primary | 拢4,000 - 拢3,532 = 拢468 x 2% plus 拢3,532 - 拢672 = 拢2,860 x 12% |
=拢9.36 =拢343.20 |
| Secondary | 拢4,000 - 拢3,532 = 拢 468 x 13.8% plus 拢3,532 - 拢676 = 拢2,856 x 0% |
=拢64.58 = 拢0 |
| Toatl NICs due | 听 | = 拢417.14 |
A monthly paid employee is under the age of 21 at the time the earnings of 拢2,300 are paid and is a member of his employers contracted out salary related pension scheme. The earnings are above the primary and secondary threshold but below the UEL and UST.
| Primary | 拢2,300 - 拢672 = 拢1,628 x 12% less 拢2,300 - 拢486 = 拢1,814 x 1.4% |
= 拢195.36 = minus 拢25.40 |
| Secondary | 拢2,300 - 拢676 = 拢1,624 x 0% less 拢2,300 - 拢486 = 拢1,814 x 3.4% |
= 拢0 = minus 拢61.68 |
| Total NICs due | 听 | = 拢108.28 |
The abolition of secondary National Insurance contributions (NICs) on earnings below the UST for those employees under the age of 21 does not alter any of the rules for assessing Class 1 NICs.