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

Which statement about the Class 1 NIC rates for 2025/26 in the Finance Act 2025 tax tables is correct?

Employer Class 1 contributions are 15% of earnings above £5,000 a year with no upper limit. Employees pay 8% on earnings between £12,571 and £50,270 and 2% above that, so the other statements are wrong.

  1. AEmployer contributions are 15% of earnings above £5,000 a year, with no upper earnings limitCorrect
  2. BEmployee contributions are 8% on all earnings above £12,570 with no reduced rate
  3. CEmployer contributions are 13.8% on earnings above £9,100
  4. DEmployee contributions are 2% on earnings between £12,571 and £50,270

Explanation

The employer rate is 15% above £5,000 and has no upper limit. Employees pay 8% between £12,571 and £50,270 and 2% above £50,270, so the other statements misstate the rates.

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