NIM01253 - Class 1 structural overview from 6 April 2003: structural changes: the Class 1 and 2 annual maximum: married women's and widows' with reduced rate elections

Regulation 21(3) of the Social Security Contributions Regulations 2001 (SI 2001 No 1004)

NIM01251 explains the calculation of the Class 1 and 2 annual maximum for employees who have more than one employment.

The calculation provides an annual maximum for all earners who have more than one employment but it does not take account of those employees who, because they hold a valid reduced rate election, will pay main primary contributions at a reduced main rate.

To ensure that these earners are catered for, regulation 21(3) provides that for the purposes of determining an earner’s liability under the maximum calculation, a person who pays an amount of primary Class 1 NICs at a rate of less than the main primary rate because they hold a valid reduced rate election shall be treated as having paid contributions at the main primary rate, which for tax year 2024 to 2025 onwards is 8%.

For the 2022 to 2023 tax year there were temporary changes made to the rates of NICs, and rate of 12.73% applies for the purpose of the annual maximum calculation, see NIM01600 for more information.

For the 2023 to 2024 tax year there was an in-year change to the rate of primary Class 1 NICs and a rate of 11.5% applies for the purpose the annual maximum calculation, see NIM01625 for more information.