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Jade’s daughter, Emerald, has recently returned to the United Kingdom after travelling overseas. She currently has no income for the tax year 2024/25. For the three-month period ended 5 April 2025, Emerald will be employed by Jade’s business at a gross monthly salary of £2,000, payable on the 5th of the month. This salary is reasonable in relation to the duties that will be performed by Emerald. So over here employee and employer nic would be apportioned?
Q2) if employee worked only 3 months from the start of the fiscal yr and then left the employer and started self employment even then we will apportion nic threshold of class 1 emplyee nic and for his employer class 1 employer nic
Q3) and as class 1 a is 13.8% will we also apportion it according to the months?
A1: Yes, as Class 1 NIC (primary and secondary) are calculated for an ‘earnings period’ (ie either weekly or monthly depending on how often the employee gets paid), then if Emerald has only been employed for 3 months, then you would only calculate the NIC for 3 months.
A2: Yes (as above). Although the limits for Class 4 NIC in relation to the self-employment would not be time-apportioned.
A3: As Class 1A is calculated on benefits, the benefits will already have been apportioned for the shorter period and so it not make sense to apportion them again when calculating the Class 1A NIC.
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