The end is NI! If you have employees aged under 21, when you pay them on or after 6 April 2015 you won’t be liable to employers’ NI unless their wages exceed the upper secondary threshold (UST). The UST is a new NI band that’s currently set at the same level as the upper earnings threshold, but HMRC says that might change in later years.
UST band. The UST for weekly pay periods is £815, £3,570 for monthly and £42,385 for annual. The latter isn’t likely to be relevant unless the person being paid is a director. The exemption only applies to employers; employees are liable to pay NI as usual.
Note. For pay above the UST employers’ NI is due.
Payroll software. The NI exemption will be programmed into your payroll software, but it won’t be applied automatically. To take advantage you’ll have to enter one of the new NI category letters in the employee’s payroll record (see The next step ).
The exemption from employers’ NI applies to employees who are under 21 when you pay them at any time after 5 April 2015. To obtain the NI saving you must enter one of the new NI category letters on the employee’s record in your payroll software.