SolvedNIM01212 | Class 1 structural overview from 6 April 2009: assessing primary Class 1 NICs from 6 April 2009.
From HM Revenue & Customs · National Insurance Manual
Section 5, 9A and 9B of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)
Regulations 10 and 11 of the Social Security Contributions Regulations 2001 (SSCR 2001)
The amount of Class 1 NICs due from 6 April 2009 remains to be calculated in the earnings period in which the earnings are paid. The amount due is the aggregate of the:
main primary percentage on so much of the earnings as exceeds the Primary Threshold (PT) but does not exceed the Upper Earnings Limit (UEL) and
additional primary percentage on all of the earnings above the UEL.
For an earner who was contracted out, the above applies, but they were entitled to a NIC rebate. The amount of NIC rebate was due on the earnings between the Lower Earnings Limit and the Upper Accrual Point.
The additional primary percentage is payable only where the earnings in the relevant earnings period exceed the UEL. This means that it is possible for a primary contributor to pay additional primary NICs even though they may not earn in excess of 52 (or 53) times the UEL in any one tax year.
From April 2011 the
main primary percentage increased to 12%
additional primary percentage increased to 2%
Section 5 of the Health and Social Care Levy Act 2021 provided that for the 2022 to 2023 tax year only, section 8 SSCBA 1992 should be read as if:
the main primary percentage was 13.25% and
the additional primary percentage was 3.25%.
The change under section 5 was repealed for payments of earnings made on or after 6 November 2022, see NIM01600 for more information about the 2022 to 2023 tax year.
Section 1 of the National Insurance Contributions (Reduction in Rates) Act 2023 provides that from the 6 January 2024 onwards, section 8 is amended so that the main primary percentage is 10%. See NIM01625 for more information about the 2023 to 2024 tax year.
From 6 April 2024, section 1 of the National Insurance Contributions (Reduction in Rates) Act 2024 amends section 8 so that the main primary percentage is 8%.
There is no limit on the amount of additional primary Class 1 NICs payable. The amount of this uncapped liability is determined by the amount of earnings in excess of the UEL paid in the relevant earnings period. The greater the earnings, the greater the amount of additional primary contributions that will be due.
For examples of the calculation see NIM01220.
Guidance on: