Understanding the Employer NIC Exemption for Apprentices
If you're an employer considering hiring apprentices, there's good news – you won't need to pay National Insurance contributions (NICs) for apprentices under the age of 25, provided certain conditions are met. This exemption – applicable to new apprentices and upskilling current employees – can significantly reduce employment costs while allowing businesses to invest in our next generation of young professionals and support important CPD opportunities.
Employers normally pay Class 1 National Insurance contributions on their employees' earnings above a certain threshold. However, under government legislation, apprentices under the age of 25 are exempt from these contributions, provided they meet the following criteria:
- They must be on an approved apprenticeship scheme.
- They must earn below the Upper Secondary Threshold of less than £50,270 per year (£967 per week – 2024/25 tax year).
Additional Benefits of Hiring Apprentices
- Beyond NIC savings, apprenticeships offer:
- Talent Development: Apprenticeships provide a pipeline of skilled workers trained to meet specific business needs.
- Enhanced Productivity: Apprentices can contribute to increased efficiency and innovation within the company.
- Government Support: Various grants and subsidies are available to support apprenticeship programs, further reducing training costs.
By integrating apprentices into your workforce, you not only invest in the future talent pool but also realise significant cost savings, making it a strategic move in the current economic climate.
