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HMRC internal manual

National Insurance Manual

Class 1 structural overview: abolition of secondary NICs for those employees under the age of 21: background

Section 9A Social Security Contributions and Benefits Act (SSCBA) 1992 - The age–related secondary percentage

A 0% rate of secondary Class 1 NICs for employees under the age of 21 was introduced from April 2015.

Primary Class 1 NICs will remain unchanged.

The 0% rate applies to earnings between the Secondary Threshold (ST) and a new Upper Secondary Threshold (UST). See NIM01297. Earnings above the UST will be assessed using the secondary Class 1 percentage rate of 13.8%.

The 0% rate applies to new and existing employees and does not exclude any employees or employers.

New category letters (see NIM01298) have been introduced to correctly assess Class 1 NICs for employees under the age of 21.

The 0% secondary Class 1 rate of NICs will no longer apply to the earnings of an employee once the employee reaches the age of 21.

The employer will continue to have a liability for Class 1 NICs, although the secondary Class 1 rate of NICs is 0%.

The requirement for an employer to operate statutory payments is unaffected.