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National Insurance Contributions Act 2002 (NICA 2002)

From 6 April 2003, primary Class 1 NICs are payable on all earnings paid in an earnings period which exceed the Primary Threshold. »Ê¹ÚÌåÓýapp amount of Class 1 NICs payable depends upon the level of earnings. This means that, from 6 April 2003, the Upper Earnings Limit is effectively removed for the purposes of calculating the amount of primary Class 1 contributions due in an earnings period.

Guidance on:

• the Primary Threshold is provided at NIM01008
• the Upper Earnings Limit is provided at NIM01009
• earnings periods is provided at NIM01003.

»Ê¹ÚÌåÓýapp amount of Class 1 NICs due from 6 April 2003 remains to be calculated in the earnings period in which the earnings are paid. »Ê¹ÚÌåÓýapp amount due is the aggregate of the:

• main primary percentage on so much of the earnings as exceeds the Primary Threshold but does not exceed the Upper Earnings Limit and
• additional primary percentage on all of the earnings above the Upper Earnings Limit.

»Ê¹ÚÌåÓýapp additional primary percentage is payable only where the earnings in the relevant earnings period exceed the Upper Earnings Limit. This means that it is possible for a primary contributor to pay additional primary NICs at 1% even though they may not earn in excess of 52 (or 53) times the Upper Earnings Limit in any one tax year.

»Ê¹ÚÌåÓýappre is no limit on the amount of additional primary Class 1 NICs payable. »Ê¹ÚÌåÓýapp amount of this uncapped liability is determined by the amount of earnings in excess of the Upper Earnings Limit paid in the relevant earnings period. »Ê¹ÚÌåÓýapp greater the earnings, the greater the amount of additional primary contributions that will be due.

Examples of the calculation are given at NIM01115.