Jurisdiction(s):
United Kingdom

UK NICs for employment-related securities and options: when Class 1 and 1A arise, including readily convertible assets, option gains, notional payments, PAYE interaction and employer recovery

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Practice notes

This Practice Note sets out when charges to National Insurance contributions (NICs)—namely primary and secondary Class 1 NICs and Class 1A NICs—arise in the context of employment-related securities and securities options.

For more information about NICs generally, see Practice Note: National Insurance contributions—introduction.
For current rates and thresholds applicable to NICs, see Practice Note: Key UK tax rates, thresholds and allowances.
For details about PAYE and employment-related securities and securities options, see Practice Notes: PAYE implications of employment-related securities, PAYE implications of securities options and PAYE—readily convertible assets, intermediaries and jurisdictional scope.
For details of an employer's reporting obligations in relation to employment-related securities and securities options, see Practice Note: Employment-related securities—reporting obligations.
For details of the NICs (and tax) implications where an internationally mobile employee has employment-related securities or securities options, including the regimes that were introduced with effect from 6 April 2025 as part of the removal of domicile as a relevant factor in the UK tax system and the abolition of the remittance basis of taxation, see Practice Note: Internationally mobile employees with employment-related securities or securities options...

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Web page updated on 22/05/2026

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