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March 9, 2015

New NI threshold

New NI threshold. For paydays on or after 6 April 2015 no employers’ NI will be payable on wages for under 21s which don’t exceed the newly introduced limit, known as the upper secondary threshold (UST). For 2015/16, the UST is £42,385 per year; that’s £815 per week or £3,570 per month. NI will apply as usual on pay above the UST.

It’s unlikely your employees aged under 21 are regularly paid more than the UST, but if they receive annual commission or bonuses, they might reach it. If so, consider spreading the commission etc. so that the employee’s pay stays below the UST for their normal pay period, e.g. £815 if they’re paid weekly. That way you’ll maximise your NI saving.

What you need to do. To take advantage of the new 0% NI band it’s essential to know the correct dates of birth for your young workers. You must also change their NI category in your payroll program.

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