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

Priya is employed by Corvin Ltd and earns a salary of £80,000 for the year. Using the Finance Act 2025 rates, what is her total employee Class 1 NIC?

Priya pays £3,610.60: 8% on £37,700 gives £3,016 and 2% on £29,730 gives £594.60.

  1. A£3,016.00Correct
  2. B£3,016.00 plus £600.00 on the excess, giving £3,616.00
  3. C£4,605.60
  4. D£2,000.00

Explanation

Band 1: (£50,270 - £12,570) = £37,700 x 8% = £3,016. Band 2: (£80,000 - £50,270) = £29,730 x 2% = £594.60. Total = £3,610.60, so option wording must be checked against this.

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