Abolition of Employer NIC for Under 21s

From 6 April 2015, employers with employees under 21 years old will no longer have to pay Employers National Insurance contributions on earnings up to the Upper Secondary Threshold, (£815.01 per week). Employees however, will not notice this change and will continue to pay the standard rate of Class 1 national insurance.

If you currently have employees aged between 16-20, when processing your first payroll of the 2015/16 year, you will need to change their NI Category (usually ‘A’) to one of the 7 new categories below:

M – not contracted-out standard rate contributions
Z – not contracted-out deferred rate contributions
Y – mariners not contracted-out standard rate contributions
P – mariners not contracted-out deferred rate contributions
V – mariners contracted-out salary related contributions
I – contracted-out salary related standard rate contributions
K – contracted-out salary related deferred rate contributions

For more information, contact a member of the payroll team on 01246 559955.

Susan Kinsella

Sue manages the Shorts Payroll team, implementing efficiencies and simplifying processes to ensure clients receive an accurate and timely payroll experience.

View my articles

Tags: Payroll