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ACCA Strategic Professional · Advanced Taxation (UK) · National insurance contributions for employed and self-employed persons

Harbour Ltd pays one employee, Dev, a salary of £62,000 for the year. Ignoring the employment allowance, what is the employer's Class 1 secondary NIC on Dev's earnings, using the Finance Act 2025 rates?

The employer's secondary Class 1 NIC is £8,550. The employer pays nothing on the first £5,000 and 15% on all earnings above that, with no upper limit. So 15% of £57,000 gives £8,550.

  1. A£9,300.00
  2. B£8,550.00Correct
  3. C£6,300.00
  4. D£8,490.00

Explanation

Employer Class 1 is nil on the first £5,000 and 15% above that. Earnings above the threshold: £62,000 - £5,000 = £57,000. £57,000 x 15% = £8,550. There is no upper limit, so the figure is not capped at £50,270, and 15% of the full salary would be £9,300.

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