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Employer NI ignores the under-21 and apprentice zero rates and the Employment Allowance #1918
Description
ni_class_1_employer applies the full employer rate (15% from 2025-26) above the secondary threshold to every earner aged 16 or over. The model does not implement:
- SSCBA 1992 s.9A. 0% secondary rate for earners under 21, up to the upper secondary threshold (SI 2001/1004 reg 10(e); £967 a week in 2026-27).
- s.9B. 0% for relevant apprentices under 25, up to the apprentice upper secondary threshold (reg 10(f)).
is_apprenticeexists, but NI does not use it. - The Employment Allowance (NICA 2014 s.1): £10,500 per eligible employer in 2026-27, set against the employer's total secondary Class 1. It is employer-level, so the right representation in a person-level model needs a design decision.
- The elective veterans and freeport/investment zone reliefs (NICA 2022 ss.1 and 6–7), for completeness.
So ni_employer is overstated for under-21s and young apprentices, and gross of the Employment Allowance.
policyengine-uk-data calibrates weights to OBR "Class 1 Employer NICs" using this model's ni_employer (targets/sources/obr.py, obr/ni_employer). Any fix interacts with calibration.
Found while fixing #1894 (PR #1895). There, the property test checks the statutory s.9 amount only from age 21, because of this gap.
Activity
MaxGhenis commentedon Sep 30, 2026
Thresholds for whoever models the under-21 and apprentice zero rates here. I checked these against the primary sources on 2026-09-30.
#1959 freezes the UEL itself through 2030-31. Tying new UST and AUST parameters to it would keep them aligned.
juaristi22 commentedon Oct 16, 2026
The Employment Allowance part of this issue is split out as #2459. It is the largest of these gaps from 2025-26 (HMRC forecasts £7.4bn), and it needs its own design decision because the allowance is set per employer and the model has no employer entity. #2459 proposes the parameters, a per-employee attribution and acceptance tests. The under-21 and apprentice zero rates and the veterans and freeport reliefs stay here.