SolvedNIM15030 | Class 1A National Insurance contributions: Calculating Class 1A NICs: Calculating the total amount of Class 1A NICs due in a tax year: Example
From HM Revenue & Customs · National Insurance Manual
NIM15010 explains how to calculate the amount of Class 1A NICs due. The example below illustrates how employers can calculate the liability.
In the 2025 to 2026 tax year, an employer provides
10 employees with cars available for private use, the cash equivalent of each is £6,000
250 employees with private medical care, the cash equivalent of each is £300
25 employees with vans available for private use, the cash equivalent of each is £500
3 employees with interest free loans, the cash equivalent of each is £3,000.
The employer reports each benefit on the individual employees’ P11Ds. The Class 1A NICs percentage rate for the 2025 to 2026 tax year is 15%.
The Class 1A NICs payable by the employer are calculated as follows
| Number of employees | Cash equivalent of each benefit (£) | Total cash equivalent for all employees (£) |
|---|---|---|
| 10 | 6000 | 60000 |
| 250 | 300 | 75000 |
| 25 | 500 | 12500 |
| 3 | 3000 | 9000 |
| - | Total | 156,500 |
| Class 1A NICs due | 15% of £156,500 | £23,475 |