National Insurance contributions

As an employer you are required by law to operate the National Insurance Contributions (NICs) system accounting for your own and employees contributions. This is normally done through the Pay As You Earn (PAYE) system.

You may have to deduct Class 1 NIC from your employees. You may also have to pay Class 1A and Class 1B NIC after the end of the tax year

 
Class Description
Class 1 Paid by people who work as employed earners, and their employers
Class 1A Paid by employers who provide certain directors and employees with benefits in kind which are available for private use, for example, cars and fuel
Class 1B Paid only by employers who enter into a Pay As You Earn (PAYE) Settlement Agreement (PSA) with HM Revenue and Customs for tax purposes

Day-to-day payroll

Booklet E13 will help you to:

  • work out how much tax and National Insurance contributions (NICs) you need to deduct when you make a payment of wages or salary to an employee, unless the employee is a director - for help on working out NICs for a director, see booklet CA44 (PDF 188K), National Insurance for company directors
  • fill in a P11 (PDF 232K), Deductions Working Sheet
  • pay over tax and NICs to HMRC
  • fill in a P11 (PDF 232K), Deductions Working Sheet if you take on a new employee
  • take the right action when an employee leaves
  • change an employee's tax code
  • identify the right rate of NICs if there is a change in an employee's circumstances
  • start or stop paying Working Tax Credit
  • make Student Loan Deductions.

If your employee

  • is sick - see the Employer's Help Book E14 (PDF 171K), What to do if your employee is sick, included on your Employer's CD-ROM or available from the Employer's Orderline.
  • tells you they, or their wife or partner, are pregnant - see the Employer's Help Book E15 (PDF 252K), Pay and time off work for
  • parents, included on your Employer's CD-ROM or available from the Employer's Orderline.
  • tells you that they, or their spouse or partner, are adopting a child - see Employer's Help Book E16 (PDF 247K), Pay and time off work for adoptive parents, included on your Employer's CD-ROM or available from the Employer's Orderline.