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HMRC internal manual

# Class 1A National Insurance contributions: Calculating Class 1A NICs: Calculating the total amount of Class 1A NICs due in a tax year: Example

[

](https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim15010) explains how to calculate the amount of Class 1A NICs due. The example below illustrates how employers can calculate the liability.

In the 2006/2007 tax year, an employer provides

• 100 employees with cars available for private use, the cash equivalent of each is £6,000
• 250 employees with private medical care, the cash equivalent of each is £300
• 25 employees with vans available for private use, the cash equivalent of each is £500
• 3 employees with interest free loans, the cash equivalent of each is £3,000.The employer reports each benefit on the individual employees’ P11Ds. The Class 1A NICs percentage rate for the 2006/2007 tax year is 12.8%.

The Class 1A NICs payable by the employer are calculated as follows

 Number of employees Cash equivalent of each benefit (£) Total cash equivalent for all employees (£) 10 6000 60000 250 300 75000 25 500 12500 3 3000 9000 Total 156,500 [

](https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim15010) explains how to calculate the amount of Class 1A NICs due. The example below illustrates how employers can calculate the liability.

In the 2006/2007 tax year, an employer provides

• 100 employees with cars available for private use, the cash equivalent of each is £6,000
• 250 employees with private medical care, the cash equivalent of each is £300
• 25 employees with vans available for private use, the cash equivalent of each is £500
• 3 employees with interest free loans, the cash equivalent of each is £3,000.The employer reports each benefit on the individual employees’ P11Ds. The Class 1A NICs percentage rate for the 2006/2007 tax year is 12.8%.
 The Class 1A NICs payable by the employer are calculated as follows 12.8% of 156,500 20,032