Class 1A National Insurance contributions: Calculating Class 1A NICs: Calculating the total amount of Class 1A NICs due in a tax year: Example
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 (£)|
|Class 1A NICs due||12.8% of 156,500||20,032|