The Standard Earnings Limit (SEL) for 2013 is £3,834 per month which is effective from 1 January 2013.
The Upper Earnings Limit (UEL) for 2013 is £12,686 per month.
From 1st January 2013 a rate of 2% continues to be levied on employer (secondary) contributions on earnings above the SEL (£3,834 per month) and up to the UEL (£12,686 per month). The contributions rates below the SEL are not affected by these changes and will remain at 6% for employees (primary) and 6.5% for employers (secondary).
Further changes to Social Security contributions rates are likely in the next few years. Changes to your payroll systems should allow for different percentage rates to be applied to both employer and employee contributions. Please note that payroll systems should allow for contributions percentage rates to be expressed to an accuracy of up to two decimal places, eg 1.23%.
An updated Standard Earnings Limit and Upper Earnings Limit will be effective from 1 January each year.
From quarter A, 2013 (January to March 2013) returns should state the gross monthly earnings of employees, up to a maximum of the new UEL of £12,686 per month.
Employers who make their returns by an automated method (ITIS, electronic, email etc) or who use a payroll provider:
- your return will need to provide five cells for monthly earnings to enable earnings of up to the Upper Earnings Limit of £12,686 to be entered from January 2013
Employers who make their returns on paper:
- there will be a maximum of five cells available to record employees' monthly wages / salary to accommodate up to the gross monthly earnings (up to the new UEL of £12,686 per month)
If you have any queries please call Social Security on +44 (0) 1534 447343.
Frequently asked questions
As an employer, are any benefits or staff bonus payments subject to contributions?
Yes, such items will be subject to contributions.
Do you issue employer contributions tables?
We no longer issue employer contributions tables; we have introduced a contributions calculator to help employers calculate the Class 1 contributions due for their employees.
What income is taken into consideration as part of the Class 1 assessment?
As was the case during 2012 directors' fees are included within the definition of earnings. Comprehensive guidance is being put together identifying how benefits in kind and other constituent parts of earnings are treated under the Social Security system.
Items to include in an employee's gross wage
Items not to include in an employee's gross wage