NIM15030 - Class 1A National Insurance contributions: Calculating Class 1A NICs: Calculating the total amount of Class 1A NICs due in a tax year: Example

NIM15010 explains how to calculate the amount of Class 1A NICs due. The example below illustrates how employers can calculate the liability.

In the 2006/2007 tax year, an employer provides

• 100 employees with cars available for private use, the cash equivalent of each is £6,000
• 250 employees with private medical care, the cash equivalent of each is £300
• 25 employees with vans available for private use, the cash equivalent of each is £500
• 3 employees with interest free loans, the cash equivalent of each is £3,000.

The employer reports each benefit on the individual employees’ P11Ds. The Class 1A NICs percentage rate for the 2006/2007 tax year is 12.8%.

The Class 1A NICs payable by the employer are calculated as follows