1 Employed earners
1.1 Class 1 contributions
(a) Class 1 NIC is paid by employees and employers
(b) Employees
The contributions begin when the employee is aged 16 or over. For 2011/12 the rate of employee Class 1 NIC is at 12%. It is paid where cash earnings exceed a threshold of £7,225 per annum, but only up to an upper limit of £42,475 per annum, however for earnings above £42,475 per annum there is a rate of 2% payable with no limit. The contributions cease when the employee reaches 60 (women) and 65 (men).
(c) Employers
The rate of employer Class 1 NIC is 13.8%. It is paid on cash earnings that exceed a threshold of £7,072 per annum. These
are payable from the employees 16th birthday – but there is no upper age limit.
1.2 Class 1A Contributions
The rate of Class 1A NIC is payable by employers on taxable benefits provided to employees. The rate is 13.8% multiplied by the value of the benefits.
| View all free ACCA F6 UK lectures >> | This lecture is based on OpenTuition F6 course notes |
the threshold for 12/13 is 7605 instead of 7225 though.
and thanks so much again for the explanations. I was just about to give up. You made it possible for me to continue.
Are benefits also time apportioned?
thanks you opentuition and admin you give me an opportunity to achieve my dream.to be an chartered accountant one day and free of charge
its just unbelivanble what open tution have made availbale for students!! It has given us such opertunity! Thanks
thanks opentuitions
and friends