Introduction to Income Tax and NICs National Insurance contributions
4.6.2 Category letters normally encountered
The following is a list of most of the NICs category letters normally encountered in payroll processing and the group that they apply to. However, there are additional category letters that apply to mariners and armed forces personnel.
A Standard rate
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• B Reduced rate for married women and widows
C Over State Pension age
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F Standard Freeport rate
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• H Standard rate, apprentices under 25 years old
• I Reduced Freeport for married women and widows
J Deferment
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L Deferment Freeport
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• M Standard rate, employees under 21 years old
S Over State Pension age Freeport
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V Standard rate veterans
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X No liability This is not a genuine category letter but is typically used where there is no liability to NICs, for example when an employee is under age 16. It is also used for reporting purposes at the end of the tax year where certain conditions are met.
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• Z Deferment, employees under 21 years old
4.7
Limits, thresholds and rates
Specific NICs percentage rates are applied to earnings that fall between various limits and thresholds that are prescribed in the NICs legislation.
Lower Earnings Limit (LEL)
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Primary Threshold (PT)
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Secondary Threshold (ST)
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Upper Secondary Threshold (UST)
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• Veterans Upper Secondary Threshold (VUST)
• Freeport Upper Secondary Threshold (FUST)
• Apprentice Upper Secondary Threshold (AUST)
Upper Earnings Limit (UEL).
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