Secondary earnings threshold meaning

In UK payroll practice, the secondary earnings threshold (often called the “secondary threshold” or ST) is the level of an employee’s earnings at which an employer starts paying secondary Class 1 National Insurance contributions (employer NICs) via PAYE. It is a statutory concept set for each tax year by regulations under the Social Security Contributions and Benefits Act 1992 and the corresponding Northern Ireland legislation, and applies consistently across England and Wales, Scotland and Northern Ireland. No employer NICs are due on earnings at or below the secondary threshold. Once earnings exceed it, employer NICs are charged at the applicable secondary Class 1 rate on the excess. Special rules apply for certain categories (for example, under‑21s, apprentices under 25, armed forces veterans and Freeport/Investment Zone employees), where alternative “upper secondary” thresholds can reduce or defer employer NICs. HMRC publishes the weekly, monthly and annual figures, which employers must operate in real time. The secondary threshold is distinct from the primary threshold for employee NICs and the lower earnings limit for benefit purposes. Republic of Ireland: the term is not used. Employer PRSI is payable from the first euro, with a lower rate below a set weekly amount and a higher rate above it.