A zero rate of secondary Class 1 National Insurance Contributions (NICs) on earnings paid to ‘relevant’ ap- prentices, i.e. those under the age of 25 and who are employed as an apprentice, will be introduced from 6 April 2016.
The zero rate will apply to earnings up to an upper sec- ondary threshold (which will be the same as the upper earnings limit for the tax year starting 6 April 2016). This means that it will be more affordable to hire new ap- prentices because NICs will only apply to the highest paid apprentices under the age of 25.
Regulations defining ‘apprentice’ for the purposes of the zero rate of employer Class 1 NICs are expected to be passed within the coming months. The Government has also indicated that guidance for employers on the definition of an apprentice and on how to apply the zero rate through payroll will be available in January 2016.