Answers · UK 2025/26
What is Class 1A National Insurance and when does an employer have to pay it?
Class 1A NI is National Insurance paid by employers -- not employees -- on most taxable benefits in kind such as company cars and private medical insurance. The rate is 13.8% of the P11D value of each benefit. Employers must file a P11D(b) return and pay Class 1A NI by 6 July following the end of each tax year.
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Class 1A National Insurance Contributions (NICs) are an employer-only charge. Unlike Class 1 NI on wages -- which is split between employer and employee -- Class 1A falls entirely on the employer and the employee pays nothing extra on their benefits through NI (though they do pay income tax via a P11D or payrolling). **When does Class 1A NI arise?** Class 1A NI arises on most P11D benefits in kind, including: - Company cars and fuel - Company vans used for private journeys - Private medical or dental insurance - Non-commercial loans above £10,000 - Living accommodation (in some circumstances) - Gym memberships and other recreational facilities **Rate** The Class 1A NI rate is **13.8%** -- the same as the employer secondary Class 1 rate on wages. **Calculation** Class 1A NI = P11D value of benefit x 13.8% Example: Company car with P11D value of £10,000 generates £10,000 x 13.8% = **£1,380** in Class 1A NI per year. **Key deadlines** - **P11D forms** (for each employee receiving a benefit): due **6 July** after the tax year - **P11D(b) return** (total Class 1A payable): also due **6 July** - **Payment**: 19 July by cheque, 22 July by electronic transfer - Late payment attracts interest and potential penalties **Payrolled benefits from April 2026** From April 2026, most benefits must be payrolled through PAYE (meaning income tax is collected in real time). However, Class 1A NI continues to be reported and paid annually via P11D(b) -- this has not changed. **Exempt benefits** Some benefits are not subject to Class 1A NI: - Employer pension contributions - Childcare and employer-supported childcare (legacy schemes) - Bikes and safety equipment (cycle to work) - Staff parties up to £150/head per year - Trivial benefits up to £50 each (max £300/year for directors)
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.