NIM01252 - Class 1 structural overview from 6 April 2009: structural changes: the Class 1 and 2 annual maximum: employees in contracted-out employment
Regulation 21(3) of the Social Security Contributions Regulations 2001 (SI 2001 No 1004)
NIM01251 explains the calculation of the Class 1 and 2 annual maximum for employees who have more than one employment.
»Ê¹ÚÌåÓýapp calculation provides an annual maximum for all earners who have more than one employment but it does not take account of those employees who, because they were in contracted-out employment, will have paid primary contributions at a reduced main rate.
To ensure that these contributors are catered for, regulation 21(3) provides that for the purposes of determining an earner’s liability under the maximum calculation, a person who pays an amount of primary Class 1 NICs at a rate of less than 12% because they were in contracted-out employment shall be treated as having paid contributions at 12%.