Class 1 National Insurance contributions (NICs) are payable by employees and employers. Employed earners (employees) pay primary contributions and employers pay secondary contributions. Employers are also liable to pay employer-only Class 1A NICs on most taxable benefits and expenses. Where a PAYE Settlement Agreement (PSA) is in place, employer-only Class 1B National Insurance contributions are payable in place of the Class 1 or Class 1A liability that would otherwise arise.

NIC rates and thresholds 2019/20

Limits

2019/20

Lower earnings limit (LEL): primary Class 1 contributions

£118 per week

Upper earnings limit (UEL): primary Class 1 contributions

£962 per week

Primary earnings threshold

£166 per week

Secondary earnings threshold

£166 per week

Upper secondary threshold for under 21s

£962 per week

Apprentice upper secondary threshold (AUST) (under 25s)

£962 per week

Employee’s primary rate (payable on earnings between earnings threshold and UEL)

12%

Employee’s additional rate (payable on earnings over UEL)

2%

Married womens’ reduced rate

5.85% on earnings between earnings threshold and UEL and 2% on earnings above UEL

Employer’s secondary Class 1 rate (on earnings above the secondary threshold/upper secondary threshold for under 21s/AUST (as appropriate))

13.8%

Class 1A rate (employer’s only)

13.8%

Class 1B rate (employer’s only)

13.8%

Employment Allowance

£3000

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