Paying employer National Insurance contributions for apprentices under 25
Updated 8 December 2021
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Overview
From 6 April 2016, employers may not need to pay Class 1 National Insurance contributions for an apprentice, if the apprentice:
- is under 25 years old
- is on an approved UK government apprenticeship standard or framework (these can differ depending on UK country)
- earns less than £967 a week (£50,270 a year)
In England, apprenticeship frameworks moved to apprenticeship standards in 2020. Existing apprentices on frameworks must have started on or before 31 July 2020.
You can check if your apprentice is on a statutory apprenticeship using the following links:
England - Standards
England - Frameworks library
Wales - Frameworks library
Scotland - Frameworks
Scotland - Graduate Apprenticeships
Northern Ireland - Frameworks
Evidence needed
If your apprentice meets the conditions listed in the Overview, you’ll need evidence to apply for national insurance relief.
Evidence can be either:
- a written agreement between you, the apprentice and a training provider
- evidence that government funding is received for the apprenticeship (England and Wales only)
The written agreement must show:
- the apprenticeship standard or framework
- a start and (expected) end date for the apprenticeship
If the training provider has not signed the written agreement, they’ll need to give you a document stating:
- that they’re an approved (recognised) training provider
- what training the apprentice is undertaking
- what training has already been completed by the apprentice
Alternatively, in England and Wales, you can provide evidence of government funding for the apprenticeship.
Evidence of funding can be either:
- a declaration that you will receive apprenticeship incentive payment
- the employer payment schedule to the provider
You can be both an employer and training provider if you’ve been approved by the Department for Education (England), or hold a contract for the delivery of Apprenticeships in Wales.
National Insurance contributions category letters to use
| Category letter | Apprentice conditions |
|---|---|
| H | Apprentice standard rate contributions, if your apprentice is under 25 and in an approved apprenticeship standard or framework |
| G | If your apprentice is a foreign-going mariner and is under 25 |
If your employee is under 21 and meets the same conditions as an apprentice under 25, use the H or G categories.
There is separate guidance and categories for employees who are not apprentices, under the age of 21.
When the statutory apprenticeship stops or your apprentice turns 25 you’ll need to use a new category letter.
The apprentice rate only applies to payments which are liable for Class 1 secondary National Insurance contributions.
What you can tell your employees
Employees will continue to pay the standard rate of Class 1 National Insurance contributions through their salary. They will not see any reduction in their payments, only the employer will benefit from this change.
The employee’s entitlement to contributory social security benefits, including the State Pension, will not be affected and neither will their entitlement to statutory payments. Existing employees may notice a change to the National Insurance category letter on their payslip.