NIM01299 - Class 1 structural overview: abolition of secondary NICs for those employees under the age of 21: assessment

The examples below use the rates that apply for the 2021 to 2022 tax year.

Example 1

A monthly paid employee is under the age of 21 at the time earnings of £1,600 are paid. The earnings fall below the Upper Secondary Threshold (UST).

Threshold	NICs calculation	NICs due
Primary	£1,600 − £797 = £803 × 12%	£96.36
Secondary	£1,600 − £737 = £863 × 0%	£0
Total NICs due	£96.36

Example 2

A monthly paid employee is under the age of 21 at the time earnings of £5,000 are paid. The earnings are above the monthly UST.

Threshold	NICs calculation	NICs due
Primary	£4,189 - £797 = £3,392 x 12%	£407.04
Primary	£5,000 - £4,189 − £811 × 2%	£16.22
Secondary	£4,189 - £737 = £3,452 x 0%	£0
Secondary	£5,000 − £4,189 = £811 × 13.8%	£111.92
Total NICs due	£535.18