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)|
|I||3.4% rebate||3.4% rebate||0%||13.8%|
|K||3.4% rebate||3.4% rebate||0%||13.8%|
See HMRC’s website for full details:- Abolishment of employer’s NI for under 21’s