NIM01545 - Class 1 Structural Overview: zero-rate of secondary NICs for Freeport and Investment Zone special tax site employees: assessment

If the Freeport or Investment Zone special tax site NICs relief is being claimed then the FUST or IZUST must be considered when calculating secondary Class 1 NICs.

Example 1

An employer claims the Freeport or Investment Zone relief for an employee whose earnings are 拢2,750 in the May 2025 pay period. Using the 2025 to 2026 tax year thresholds, the secondary NICs are calculated as:

  • Identify the earnings up to the Secondary Threshold (ST) of 拢417 - no NICs are due on these earnings
  • Identify the earnings between 拢417.01 and the monthly FUST or IZUST of 拢2,083 鈥� no NICs are due on these earnings
  • Identify the earnings above the monthly FUST or IZUST of 拢2,083听鈥� NICs are due and the secondary NICs percentage rate is applied to听earnings of 拢667

Example 2

An employer claims the Freeport or Investment Zone relief for an emplyee whose earnings are 拢2,000 in the June 2025 pay period. Using the 2025 to 2026 tax year thresholds, the secondary NICs are calculated as:

  • Identify the earnings up to the Secondary Threshold (ST) of 拢417 - no NICs are due on these earnings听

  • Identify the earnings between 拢471.01 and the monthly FUST or听IZUST of 拢2,083 鈥� no NICs are due on these earnings听

  • As the earnings are less than the monthly FUST or听IZUST OF 拢2083, no secondary NICs are payable.听