NIM15030 - 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 2019/2020 tax year, an employer provides

• 10 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 2019/2020 tax year is 13.8%.

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
Class 1A NICs due	13.8% of 156,500	21,597