From 6th April 2015, a new NI band called the Upper Secondary Threshold (UST) has been created to facilitate the abolition of employer National Insurance contributions for employees under the age of 21. The Upper Secondary Threshold is £815 per week. Earnings above this threshold will remain subject to secondary Class 1 National Insurance Contributions. There are four new National Insurance category letters for these employees; M,Z, I and K. M will be used for not-contracted our standard rate contributions for under 21 year olds, so you will need to make sure your payroll software will apply these new NIC letters accordingly. Once the employee is 21 they are to be changed and calculated using the appropriate normal NI letter.
Under 21’s National Insurance
