Jurisdiction(s):
United Kingdom

Employer recovery of Class 1 NICs from employees: general prohibition, securities/options exceptions, and HMRC joint elections (pre-approved forms, approval, notification and payment arrangements)

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Practice notes

This Practice Note clarifies when a secondary contributor can, and cannot, recover employer’s NICs from an earner (that is, an employee or director). For ease, it uses the terms ‘employer’ and ‘employee’ instead of ‘secondary contributor’ and ‘earner’. The core statutory framework for NICs is found in the Social Security Contributions and Benefits Act 1992, with the principal secondary rules set out in the Social Security (Contributions) Regulations 2001 (SI 2001/1004). For current NICs rates and thresholds, see Practice Note: Key UK tax rates, thresholds and allowances. For when primary and secondary Class 1 NICs and Class 1A NICs arise in relation to employment‑related securities and securities options, see Practice Notes: NICs implications of employment‑related securities and securities options and Tax and other rates which are relevant to share incentives.

Prohibition on recovery of employer's NICs

There is a general prohibition preventing anyone liable to pay secondary (broadly, employer’s) Class 1, Class 1A or Class 1B NICs from:

making deductions
recovering those contributions by any other means, or
entering into any agreement to make such deductions or recover them

This prohibition is general...

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Web page updated on 21/05/2026

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