National Insurance for young employees

I am thinking about taking on a school leaver. Am I right in saying that there has been a change with regards to their National Insurance?

1st February 2015

The current rate of secondary Class 1 National Insurance contributions for the tax year 2014 to 2015 is 13.8% on earnings above the Secondary Threshold (ST) of £153 per week.

From 6th April 2015 that rate is reduced to 0% for those employees who are over 16 and under 21, with earnings between the Secondary Threshold and the Upper Secondary Threshold. For 2015/16, the Upper Secondary Threshold will be the same as the Upper Earnings Limit. 

Employees won’t see any reduction in their payments and will continue to pay National Insurance contributions through their salary as normal. Their entitlement to contributory social security benefits, including State Pension won’t be affected. But they may notice a change to the National Insurance category letter recorded on their payslip.

It’s employers who will benefit from this change, as they may not pay any secondary National Insurance on the young employees that qualify. 

If you'd like any support with your payroll, please contact us and we can put you in touch with your local TaxAssist Accountant. 


By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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