Class 1 NIC

The usual class of NIC that applies to earnings from an employment is Class 1, which has both an employee and an employer contribution. These are collected throughout the year under the PAYE system (see the NIC on cash earnings ― overview guidance note).

Earnings are defined for the purposes of NIC as including 'any remuneration or profit derived from an employment and for the majority of cases, can be taken as having the same meaning as earnings for the purposes of tax, as defined in ITEPA 2003, s 62. See the Tax on cash earnings ― overview guidance note. The interpretation of the definition of earnings for tax purposes from various court cases also applies to the definition of earnings for NIC purposes.