Employer National Insurance Contributions for Apprentices Under 25: What You Need to Know

Understanding the Exemption

Since 6 April 2016, UK employers have been exempt from paying Class 1 National Insurance contributions (NICs) for apprentices under 25 years old, provided they meet certain conditions. This exemption applies if the apprentice:

• Is enrolled in an approved UK government apprenticeship standard or framework
• Earns less than £967 per week (£50,270 per year)

Employers must ensure they use the correct National Insurance category letter when processing payroll:

• H – Standard rate contributions for apprentices under 25
• G – If the apprentice is a foreign-going mariner under 25

Evidence Required

To qualify for the exemption, employers must provide proof that the apprentice is on a statutory apprenticeship. Acceptable evidence includes:

• A written agreement between the employer, apprentice, and training provider
• Documentation confirming government funding for the apprenticeship (England and Wales only)

How to Backdate Claims

If an employer has incorrectly paid NICs for an eligible apprentice, they can backdate claims to recover overpaid contributions for up to four tax years. This means that if an employer has mistakenly paid NICs for an eligible apprentice, they can recover contributions dating back to the 2021/22 tax year (as of the 2025/26 tax year). The process involves:

1 – Reviewing payroll records to identify incorrect NIC payments
2 – Submitting a claim to HMRC with supporting evidence (e.g., apprenticeship agreements)
3 – Adjusting payroll to reflect the correct NIC category

Employers should act promptly to ensure they recover any overpaid contributions within HMRC’s allowable timeframe.

For further guidance, visit Paying employer National Insurance contributions for apprentices under 25 – GOV.UK

If you have any queries concerning the above or would like any assistance with these changes then please contact James Alesbury on 023 8046 1222 or email James Alesbury.