Glossary · UK
What is Class 1B National Insurance?
Employer NI on items included in a PAYE Settlement Agreement (PSA), paid annually.
Full Definition
Class 1B National Insurance is paid by employers on the value of minor or irregular benefits and on the income tax due under a PAYE Settlement Agreement. From 6 April 2025 the rate is 15% (matching Class 1 employer rate), payable by 19 October (postal) or 22 October (electronic) following the tax year. PSAs are used so the employee does not have to declare small staff entertaining, long-service awards or staff gifts on their own tax return. Class 1B sits alongside Class 1A (which covers most reportable benefits-in-kind such as company cars).
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.