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Apr 7 / Posted by Karen Garrattley

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Abolishment of employer’s national insurance for under 21’s

It is unlikely as an employer that you will have to pay national insurance for any employees under 21 years of age. From 6th April, use the national insurance category M for all under 21’s*.

Employer National Insurance contributions for employees under the age of 21 will no longer be payable on earnings up to the Upper Secondary Threshold which is £851 in the tax year 2015/2016.

*Letter M is the most common. The other categories to consider are:-

  • Z – not contracted-out deferred rate contributions
  • Y – mariners not contracted-out standard rate contributions
  • P – mariners not contracted-out deferred rate contributions
  • V – mariners contracted-out salary related contributions
  • I – contracted-out salary related standard rate contributions
  • K – contracted-out salary related deferred rate contributions

There are different employer contribution rates for employees under 21.

Category letter£112 to £156 a week (£486 to £672 a month)£156.01 to £770 a week (£672 to £3,337 a month)£770.01 to £815 a week (£3,337 to £3,532 a month)Over £815 a week (£3,532 a month)
I3.4% rebate3.4% rebate0%13.8%
K3.4% rebate3.4% rebate0%13.8%
M0%0%0%13.8%
Z0%0%0%13.8%

See HMRC’s website for full details:- Abolishment of employer’s NI for under 21’s

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Categories: All News & Knowledge Base, HMRC tax, NI & VAT

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