NIM01571 - Class 1 Structural Overview: zero-rate of secondary NICs for Freeport employees: examples: Example 1 – Employee is not a qualifying employee

Example 1 – Employee is not a qualifying employee

The employer hires an employee on 1 October 2022 who is paid £3,000 per month gross by the employer (£36,000 a year).

At the start of the employment the employer reasonably expects that the employee will spend 2 days (40% of their working time) at the employer’s business premises in a Freeport tax site and 3 days (60% of their working time) working from home so the employee does not meet the 60% rule.

The employee was not employed by the employer or a connected employer in the previous 24 months.

The employee does not meet the rules for claiming the relief so the employer cannot claim the relief.

The employer will pay secondary National Insurance contributions as normal without claiming the relief on all earnings above the Secondary Threshold (£737 per Month).