NIM01545 | Class 1 Structural Overview: zero-rate of secondary NICs for Freeport and Investment Zone special tax site employees: assessment

If the Freeport or Investment Zone special tax site NICs relief is being claimed then the FUST or IZUST must be considered when calculating secondary Class 1 NICs.

Example 1

An employer claims the Freeport or Investment Zone relief for an employee whose earnings are £2,750 in the May 2025 pay period. Using the 2025 to 2026 tax year thresholds, the secondary NICs are calculated as:

• Identify the earnings up to the Secondary Threshold (ST) of £417 - no NICs are due on these earnings

• Identify the earnings between £417.01 and the monthly FUST or IZUST of £2,083 – no NICs are due on these earnings

• Identify the earnings above the monthly FUST or IZUST of £2,083 – NICs are due and the secondary NICs percentage rate is applied to earnings of £667

Example 2

An employer claims the Freeport or Investment Zone relief for an emplyee whose earnings are £2,000 in the June 2025 pay period. Using the 2025 to 2026 tax year thresholds, the secondary NICs are calculated as:

• Identify the earnings up to the Secondary Threshold (ST) of £417 - no NICs are due on these earnings

• Identify the earnings between £471.01 and the monthly FUST or IZUST of £2,083 – no NICs are due on these earnings

• As the earnings are less than the monthly FUST or IZUST OF £2083, no secondary NICs are payable.