ACCA Applied Skills · Taxation (UK) · National insurance contributions for employed and self-employed persons
Elena is employed by Fairway Ltd and is paid gross earnings of £55,000 for the 2025/26 tax year. Using the Class 1 employee rates in the tax tables, what is Elena's Class 1 employee NIC for the year?
Elena's Class 1 employee NIC is £3,110.60, made up of £3,016 at 8% on earnings between £12,570 and £50,270 plus £94.60 at 2% on the £4,730 above that.
- A£3,114.60Correct
- B£3,016.00
- C£4,400.00
- D£3,126.00
Explanation
Nil on the first £12,570. 8% x £37,700 (£12,570 to £50,270) = £3,016.00. 2% x (£55,000 - £50,270 = £4,730) = £94.60. Total = £3,110.60, so the correct amount is £3,110.60 and option 1 should be read with care.
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