ACCA Applied Skills · Taxation (UK) · Income from employment
Anita is employed and, in 2025–26, her employer pays her salary of £45,000. Her employer is not entitled to the employment allowance. What is the employer's Class 1 national insurance contribution on her salary for 2025–26?
The employer's Class 1 NIC is £6,000. It is charged at 15% on earnings above the £5,000 annual threshold, so £40,000 multiplied by 15% gives £6,000, and the employment allowance does not apply here.
- A£6,000Correct
- B£6,750
- C£3,000
- D£4,500
Explanation
Employer Class 1 NIC is 15% on earnings above £5,000. So (£45,000 − £5,000) × 15% = £6,000. The distractor £6,750 applies 15% to the whole salary and ignores the £5,000 threshold.
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