HMRC have updated their booklet CWG2, the ‘further guide to PAYE and National Insurance contributions’, a document we refer to in less common payroll situations.
The 2025/26 version has gone through several publications and updates:
- It was published on 12 February 2025;
- Updated on 06 April 2025;
- Updated on 01 May 2025.; then
- Updated on 18 September 2025
We detail the 18 September 2025 update which is to section 3.9.1. This section details the employer zero rate of National Insurance Contributions (NICs) on earnings up to the Upper Secondary Threshold (UST) for employees under 21 on payday:
- Category letter M is used standard rate contributions;
- Category letter Z is used for deferred rate contributions;
- Category letter Y is used for mariners (standard); and
- Category letter P is used for mariners (deferred)
All that has happened is HMRC have inserted two examples to show how no employer NICs are payable on earnings up to and including the UST. The examples show how NICs are payable on earnings above the UST.
For Bookkeepers
It is always important to ensure you are referring to the latest version of the CWG2 (dated 18 September 2025).
