Class 1a: The Unexpected Benefits

Class 1a nics are a specific type of national insurance contribution paid by you (the employer). Theyre due on most taxable benefits provided to your employees. These benefits are often referred to as benefits in kind and can include things like: Directors and certain senior employees. If you provide work benefits (also known as benefits in kind) to your employees, then its important to meet the deadline to pay class 1a national insurance contributions on those benefits.

Hm revenue and customs (hmrc) has updated the cwg5, class 1a national insurance contributions on benefits in kind guidance to include the 2024/25 version. This guide is useful for anyone that provides expenses and benefits to employees. From april 2026, employers will need to report and pay income tax and class 1a national insurance contributions (nic) on benefits in kind through payroll. Essentially, all benefits that would normally be reported on a p11d will be integrated into the payroll under the new system. Employers must pay the relevant class 1a national insurance by 19 july following the end of the tax year, or 22 july for online payments. Currently, employers can apply to payroll most biks so that the benefit is reported and taxed under rti (real time information). Here are some examples of benefits that attract class 1a national insurance: Termination awards exceeding the 30,000 threshold that have not already been subject to class 1 nics deductions. When are you exempt from paying class 1a nics?