NIM01001 - Class 1 Structural Overview: General

Class 1 NICs are earnings-related and comprise two elements: the primary Class 1 contribution payable by employed earners, and the secondary Class 1 contribution payable by employers and other persons paying earnings (see NIM01015).

In general, liability to pay Class 1 contributions is limited to persons who fulfil prescribed conditions of residence or presence in the United Kingdom (UK) (see NIM33000 onwards), and no person is entitled to pay Class 1 contributions other than those for which they are liable.

Where an employee is subject to UK legislation as an employed earner and is: 

  • in the UK, or  

  • treated as if they are in the UK  

at the time the work is carried out, then Class 1 NICs liability arises at the time the earnings are earned, and the Class 1 NICs liability is assessed and payable when the earnings are actually paid.  This applies even if the employee is no longer subject to UK legislation when those earnings are actually paid. 

A Class 1 contribution is payable or treated as paid, in respect of earnings (see NIM02000 onwards) from an employed earner’s employment or by those whose employment is treated as such by regulations except where the earner:

  • is under age sixteen at the time payment is made; or
  • has earnings less than the Lower Earnings Limit ('LEL', see NIM01005) current at the time but employers must pay secondary Class 1 NICs where earnings are above the Secondary Threshold; or
  • the employee is at or over State pension age at the time payment is made (see NIM36000) but employers must continue to pay secondary Class 1 NICs for those employees over this age.