Glossary · UK
What is Lower Earnings Limit (LEL)?
The minimum weekly earnings threshold (GBP 125/wk, GBP 6,500/yr in 2026/27) at which employees are treated as paying NICs for benefit entitlement purposes, even though no NI is actually deducted.
Full Definition
The Lower Earnings Limit (LEL) is the weekly earnings floor below which an employee neither pays National Insurance contributions nor earns NI credits. For 2026/27 the LEL is GBP 125 per week (approximately GBP 6,500 per year). Workers earning at or above the LEL but below the Primary Threshold (GBP 242/week, GBP 12,570/year) are treated as if they have paid NICs -- their State Pension qualifying year count is protected and they remain entitled to Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP) and Bereavement Support Payment, even though no employee NI is actually deducted from their wages. This zero-rate-but-credited band is a deliberate policy to protect low-paid and part-time workers. Workers earning below the LEL earn no NI qualifying year and do not trigger entitlement to statutory payments. Employers are not required to operate a payroll if all employees earn below the LEL, though they must notify HMRC if the Secondary Threshold (GBP 5,000/year) is crossed. The LEL also affects qualifying earnings for automatic enrolment pension contributions, which are calculated on a band between the qualifying earnings lower limit (aligned to the LEL) and the upper limit.