Class 1 rates and thresholds

Class 1 - Employed and contracted-out - Rates and thresholds

2024/25 Employee (%) 2024/25 Employer (%) 2025/26 Employee (%) 2025/26 Employer (%)
Below Lower Earnings Limit (LEL)2024/25 Employee%2024/25 Employer%2025/26 Employee%2025/26 Employer%
Above LEL to Earnings Threshold (ET)2024/25 Employee%2024/25 Employer%2025/26 Employee%2025/26 Employer%
Above ET to Upper Accruals Point (UAP)2024/25 Employee 10.60%2024/25 Employer 10.00%2025/26 Employee 10.60%2025/26 Employer 10.00%
Above UAP to Upper Earnings Limit (UEL)2024/25 Employee 8.00%2024/25 Employer 13.80%2025/26 Employee 8.00%2025/26 Employer 15.00%
Above UEL2024/25 Employee 2.00%2024/25 Employer 13.80%2025/26 Employee 2.00%2025/26 Employer 15.00%
NIC rebate between LEL and ET2024/25 Employee 1.40%2024/25 Employer 3.40%2025/26 Employee 1.40%2025/26 Employer 3.40%

As a result of the proposed introduction of the single-tier State Pension, contracting out via a defined benefit pension scheme will no longer be possible from 6 April 2016.

From 6 April 2015 employers will no longer be required to pay Class 1 NICs on earnings up to the UEL for any employee aged under 21