The Secondary Threshold for National Insurance

Understand the secondary threshold for national insurance, the 2021/2022 NI rates payable and how these will change in the future tax years.

Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.

1. How Does the Secondary Threshold for National Insurance Work?

Employers pay Class 1a national insurance on staff on their payroll above the secondary threshold. Below this level, the employer NI rate is 0% for certain employees under 21, apprentices under 25 and certain military veterans.

2. How Much is the NI Secondary Threshold?

There are two types of secondary thresholds for NI in the UK set by HMRC – one relates to apprentices (known as the Upper Secondary Threshold) and the other to the remaining types of employees.

The main secondary threshold for NI for the most recent tax years are:

  • Tax Year 2021/2022: Over £170 per week/£737 per month/£8,840 per year 13.8%
  • Tax Year 2020/2021: Over £169 per week/£732 per month/£8,788 per year 13.8%

Upcoming changes to the secondary threshold have been announced as part of the Autumn Budget and include an increase of the employers’ NI rate payable to 15.05% from 13.8% from the tax year 2022/2023. That’s an increase by 1.25% in line with the new taxation for the NHS and social care. Read more about the Autumn Budget Changes.

class 1 national insurance 2022 2023
An Overview of Class 1 National Insurance

2.1 Upper Secondary Threshold for NI

The upper secondary threshold for NI for the tax year are:

  • Tax Year 2021/2022: Over £967 per week/£4,189 per month/£50,270 per year 13.8%
  • Tax Year 2020/2021: Over £962 per week/£4,167 per month/£50,000 per year 13.8%
  • Tax Year 2019/2020: Over £167 per week/£727 per month/£8,722 per year 13.8%

Employees pay different Class 1 national insurance rates through their payslips, again depending on their earnings and the applicable thresholds.

3. What is the Difference Between The Primary and Secondary Threshold for National Insurance?

The difference between the primary and secondary threshold for NI is that the primary threshold relates to employees national insurance. The secondary threshold for national insurance is only relevant for employers national insurance payments.

4. Benefits in Kind for National Insurance

Class 1a national insurance is payable by employers on benefits in kind given to employees such as private medical or a company car. Trivial benefits are excluded from these rules. Employees pay additional income tax on any benefits in kind they receive from their employer. Any additional national insurance payable needs to be reported to HMRC using P11d form and P11d(b) form.

Related:

Taxes are changing! From April 2024 sole traders will need to report their earnings and pay tax on a quarterly basis. This is known as Making Tax Digital, which you can read more about in this guide to help you get prepared.

About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek and money nerd helping financial DIY-ers organise their money so they can hit their goals quicker.