Employment

In this lesson

1. 0:00 Employment earnings and Class 1 National Insurance
2. 0:48 Calculating Class 1 employee National Insurance
3. 1:36 Calculating Class 1 employer National Insurance
4. 2:23 Employment allowance and how it works
5. 3:16 Class 1A National Insurance on benefits
6. 3:55 Administration and payment deadlines

About this lesson

You'll discover what counts as earnings for National Insurance purposes, explore the different rates and thresholds that apply, and understand key allowances like the Employment Allowance that can reduce employer contributions. This is essential knowledge for the TX paper, where National Insurance calculations form a core part of personal and corporate tax planning. The lesson covers class one National Insurance for employees, which is charged at 8% on earnings between the primary threshold (£12,570) and upper earnings limit (£50,270), then 2% above that. You'll learn that employer National Insurance is charged at 15% on all earnings above the secondary threshold of £5,000 with no upper limit, and that employers can claim the Employment Allowance to reduce this liability by up to £10,500 per year. The lesson also explains class one A National Insurance, paid by employers at 15% on taxable benefits, and clarifies important exclusions like statutory mileage allowances and reimbursed business expenses that don't count as earnings. Understanding these rules is crucial for advising clients on tax-efficient remuneration strategies and calculating accurate tax liabilities in exam scenarios. The lesson walks through practical examples and reminds you that all National Insurance contributions are collected through PAYE, with payments due by the 22nd of the following month.

Duration: 4m