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ACCA Applied Skills · Taxation (UK) · National insurance contributions for employed and self-employed persons

Which of the following statements about Class 1 employee NIC for 2025/26 is correct?

Employee Class 1 NIC is charged at 8% on annual earnings between £12,571 and £50,270, with 2% above that. The 15% rate over £5,000 is the employer's rate, and benefits attract employer Class 1A only.

  1. AThe 2% rate applies to all earnings above £12,570
  2. BEmployee Class 1 NIC is charged at 8% on earnings between £12,571 and £50,270Correct
  3. CEmployee Class 1 NIC is charged at 15% on earnings above £5,000
  4. DEmployee Class 1 NIC applies to taxable benefits in kind

Explanation

The tax tables show nil up to £12,570, 8% from £12,571 to £50,270 and 2% above £50,270. The 15% rate with the £5,000 threshold relates to employer Class 1 NIC. Benefits in kind attract Class 1A for the employer, not employee NIC.

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