Abolition of Employer National Insurance for Under 21s

The Government announced their intention to abolish National Insurance contributions for under-21s for the 2015-16 tax year, providing a significant financial incentive for businesses of all sizes to employ young people.  Under-21 employees earning more than £42,285 per annum are considered above the Upper Earnings Limit and employer NIC will be liable as normal, however this will affect a very small minority of young workers.

Please note, this is the Employers NI Contribution, not the Employees.  Employees will continue to pay NI as normal.

More guidance can be found using the links below:

abolition-of-employer-national-insurance-contributions-for-under-21s-employer-guide–2

abolition-of-employer-national-insurance-contributions-for-under-21s-examples

Capita have changed the following areas to facilitate this change

Focus | Personnel Links | Salary Projection

Focus | Personnel Links | Salary Calculator

From 6 April 2015, the National Insurance employer’s Class 1 secondary contribution will not be required for employees under the age of 21 on earnings up to the upper earning limit for the employee. The employer’s contribution will be calculated from the 1st of the month in which the employees becomes 21.

To ensure that Personnel Links accurately projects the National Insurance contribution for all employees, it is critical that the date of birth held in Personnel is accurate.

Additionally, within Salary Calculator, the Staff Member is Under 21 check box has been added to indicate that any proposed new employees will be expected to be under 21 for the duration of the financial year.