Class 1 rates and thresholds

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

2019/20 Employee (%) 2019/20 Employer (%) 2020/21 Employee (%) 2020/21 Employer (%)
Below Lower Earnings Limit (LEL)2019/20 Employee%2019/20 Employer%2020/21 Employee%2020/21 Employer%
Above LEL to Earnings Threshold (ET)2019/20 Employee%2019/20 Employer%2020/21 Employee%2020/21 Employer%
Above ET to Upper Accruals Point (UAP)2019/20 Employee 10.6%2019/20 Employer 10.0%2020/21 Employee 10.6%2020/21 Employer 10.0%
Above UAP to Upper Earnings Limit (UEL)2019/20 Employee 12.0%2019/20 Employer 13.8%2020/21 Employee 12.0%2020/21 Employer 13.8%
Above UEL2019/20 Employee 2.0%2019/20 Employer 13.8%2020/21 Employee 2.0%2020/21 Employer 13.8%
NIC rebate between LEL and ET2019/20 Employee 1.4%2019/20 Employer 3.4%2020/21 Employee 1.4%2020/21 Employer 3.4%

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