Payroll Hub · Simple employer guide
What employers need to know about Class 1A from April 2027
A plain-English guide to the employer cost and the one-off cash-flow overlap in 2027.
Best for: Business owners and people working in payroll, finance or HR
- Plain-English guide
- Reviewed 11 August 2026
In simple terms
Status: HMRC interim guidanceClass 1A National Insurance is paid by the employer, not the employee. HMRC’s current plan is for the amount on affected benefits to be reported through payroll from April 2027. It should never be taken from the employee’s pay or shown as their deduction.
Why does July 2027 need special planning?
You may still have the final annual Class 1A bill for 2026/27 while starting to pay Class 1A under the new 2027/28 process. Budget for both so the overlap does not come as a surprise.
What Class 1A rate should employers use?
Use the official rate for 2027/28 once it is confirmed. Do not assume the previous year’s rate will stay the same.
Optional detail
Official guidance behind this answer
The short answers above are enough to get started. Open these sections only if you need to check the current HMRC position or source.
How will Class 1A National Insurance contributions work from April 2027?
Status: HMRC interim guidanceHMRC’s current plan is for employers to report and pay Class 1A National Insurance on affected benefits through payroll from April 2027. Class 1A is an employer cost, not an employee deduction.
Read the full answer and official source
Employers should budget for a possible overlap in 2027: the final annual payment for 2026/27 may fall due while the new in-year process has already started.
Source: HM Revenue and Customs — Reporting Class 1A National Insurance contributions
Source updated: . Workmax reviewed: .
Plain-English Benefits in Kind glossary
- Benefit in Kind (BiK)
- A non-cash benefit or expense provided by an employer that may create an Income Tax liability.
- Payrolling benefits
- Including a benefit's taxable value in payroll so Income Tax is collected through PAYE.
- Cash equivalent
- The statutory taxable value of a benefit, which may differ from its purchase price or cash cost.
- Class 1A NIC
- An employer National Insurance liability charged on many taxable benefits and expenses.
- P11D
- The end-of-year form traditionally used to report taxable expenses and benefits for an employee.
- FPS
- The Full Payment Submission employers send through Real Time Information when payroll is reported to HMRC.
