Class 1 contributions for employers

Reporting class 1 contributions

If you’re an employer, you must submit your employees' earnings with the primary and secondary contributions on your combined employer return. This must be done within 15 days after the end of each month.

You’ll need to provide information including:

• who you have employed
• how much you paid each employee
• the date any employees started or stopped working for you that month

Completing your combined employer return

Paying your class 1 contributions

Payment of your class 1 contributions must be made within 15 days after the end of each month.

Pay your contributions and instalments

A statement of account will be sent to you at the end of each quarter so you can check your payments.

Making a mistake on your combined employer return

If you realise that you made a mistake after you've submitted your combined employer return, you need to resubmit the return.

Showing holiday pay on your return

If you pay your employees’ holiday pay before their normal pay day you should deduct contributions as if the wages were paid on the normal day.

For example, a weekly paid employee takes a week holiday in August and they are paid £250 per week. You pay the employee’s holiday pay in July but you must show on your return that you paid them in August.

Showing benefit deductions on your return

You only need to show Social Security benefit deductions on your return if you continue to pay normal wages to employees when they’re ill. They need to give you the value of the benefit they receive.

We put a credit on the employee’s account for each day that we pay benefit. These credits protect their Social Security record against the loss of earnings.

You must show the adjustment on the return as if it had been made in the month the employee was ill. Your wage records will be different from the return. Make a note that this is due to the Social Security benefit.

For example, an employee is ill in August and you continue to pay their normal wage. They give you the value of the Social Security benefit in September after you have submitted the August return. You'll need to adjust the employee’s wages and contributions in September.

About Class 1 contributions

As an employer you must pay Class 1 contributions for employees earning the minimum earnings threshold or more.

Class 1 contributions are made up of the primary and secondary contribution.

• Blue card (FR1): both primary and secondary contributions are payable
• Red card (XR1): only the secondary contribution is payable

Primary contribution

The primary contribution must be deducted from your employees’ wages before you pay them.

This is 6% of your employee's monthly or weekly social security gross wage, up to the Standard Earnings Limit (SEL). The SEL for 2023 is £5,060 per month.

Contribution levels you and your employer pay

Secondary contribution

The secondary contribution must be paid by the employer.

This is 6.5% of your employee's monthly or weekly social security gross wage, up to the Standard Earnings Limit (SEL). The SEL for 2023 is £5,060 per month.

For any wages paid above the SEL, the employer must pay an additional 2.5% up to the Upper Earnings Limit (UEL). The UEL for 2023 is £23,072.

Contribution levels you and your employer pay

Who you have to pay contributions for

You must pay Class 1 contributions for all employees who:

• earn the minimum earnings threshold or more for the pay period
• have a blue (FR1) registration card or a red (XR1) registration card
  
• are aged between 16 (compulsory school leaving age) and pension age
  
• are labour only sub-contractors
• are not the spouse or civil partner of the company or business owner
  

You do not have to pay contributions for or include on your return:

• employees working less than the minimum earnings threshold
• labour only sub-contractors
  
• employees aged under 16 (compulsory school age)
• the spouse or civil partner of the company or business owner (they are Class 2)
  

You also do not have to hold a registration card for them.

Employees working outside the Island

You must still pay contributions for employees temporarily working outside the Island for a Jersey business. There are different time limits depending on where they temporarily work. 

Contact us for further details and advise as we may need to issue a Certificate of Continued Liability for the employee.

Employees with more than 1 job with the same employer

If an employee works more than 1 job for the same employer, they must add the earnings from each job to calculate the payable contributions on the total earnings.

Employees with more than one employer

You can set up a single service agreement when two or more employers are employing the same person. This is a private arrangement between employers and is optional.

If the employers agree to it, one of them can complete the monthly combined employer return and combine the earnings from all the employee’s jobs. If the combined earnings is the minimum earnings threshold or more then the primary and secondary contributions must be paid.

If there’s no single service agreement between employers, each employer must submit the employee’s earnings separately on their combined employer return, where the Minimum Earnings Threshold.

Minimum earnings threshold

You must pay contributions for employees earning the threshold or more. 

The threshold you use to calculate the amount of contributions is determined by the payment frequency you pay the employee. Contributions must be calculated over the employee’s gross earnings.

You must calculate contributions over the whole gross earnings for the relevant period, not just the minimum earnings threshold.

When paying contributions for weekly paid employees you should round the wage down to the nearest 25 pence. For monthly paid employees you should round the earnings down to the nearest pound.

We publish the new thresholds in January.

Calculation of contributions

To help you calculate the amount of contributions you must pay use the contributions calculator.

You must use employees’ gross earnings to calculate contributions. Gross earnings are employees’ wages before any deductions are made.

Items to include in an employee's gross wages

Items not to include in an employee's gross wages

When paying contributions for weekly paid employees you should round the wage down to the nearest 25 pence.

Monthly paid employees

For monthly paid employees you should round the earnings down to the nearest pound. 

Daily

You need to pay contributions as long as the employee earns the weekly minimum earnings threshold or more.

Employees receiving pay after they left your employment

You must treat any wages you pay to employees after they left as if it had been paid in the month they left. 

You need to pay contributions if the payment should be included in the employee’s gross earnings.

If you have not submitted your monthly return you can add the extra pay to the amount already paid and show the total amount on the return. If the total earnings are above the monthly earnings limit threshold, only deduct Primary contributions up to the threshold.

If you have already submitted your monthly return you need to send a replacement return for the month showing the correct pay.

Unusual pay practices

Most employers pay their employees on a weekly or monthly basis. However, some employers have unusual pay practices to reduce or avoid paying contributions.

We can recalculate contributions due for all your employees back to when the unusual pay practice started. Contributions will be calculated as if you had followed a normal pay practice.

Keeping a running total of weekly paid wages

Legally you must keep a running total of wages paid of all employees in a calendar month.

You must adjust contributions if a weekly paid employee earns more than the monthly Standard Earnings Limit (SEL).

In the example below, the total cumulative monthly earning is more than the SEL by £190 (£5,250 - £5,060 = £190). You would calculate and deduct the final week's salary primary contributions of 6% over £860 (£1,050 - £190) and not from £1,050.

Employees changes in circumstances

Name changes

If an employee changes their name, they must come to Customer and Local Services. They must bring their current registration card and documentation showing their new name, for example their marriage certificate. We’ll give them a new registration card with their new name.

They should show you their new registration card for you to copy and change their name on your return.

Changes in registration card

If an employee changes their liability, they’ll have to come to Customer and Local Services and change their registration card.

You should carry on paying the employee’s contributions as if you were holding the old card until you're shown and have a copy of the new card.

Stop working

When an employee stops working for you, you need to enter the date the employee stopped working for you on your combined employer return.

Individuals not liable to primary contributions

An employee does not have to pay primary contributions from the month after they reach pension age and in some other circumstances.

You must stop deducting primary contributions from their wages when you have sight of their red (XR1) card.

You should keep a copy of the new card with a copy of their photographic ID.

Never stop deducting contributions on the word of the employee. The registration card is your only authority to do this.

You must continue to pay secondary contributions and put them on your combined employer return for as long at the employee works for you.

If an employee has exchanged their red (XR1) registration card for a blue (FR1) registration card you must start deducting primary contributions from their wages once you have sight of their new registration card.

Death

You must pay for contributions on all wages up to the date of death.

You can ignore wages paid after the date of death.

An employee who has chosen not to pay contributions can cancel it at any time.

Age of employee when social security contributions must be deducted 

Contributions must be deducted when an employee reaches school leaving age.

You are not required to deduct contributions from employees who are under the school leaving age and these employees don't get included on your employer's return.

Calculating school leaving age

1. take the individual's date of birth
   
2. add 16 years to reach the date of the individual's 16th birthday
   
3. add 4 months to adjust the date (the school year is offset by 4 months from the calendar year
   
4. use the year from this date as the year the individual attained school-leaving age 
   

Turning 16 years old

An employee must start paying contributions from the first day of the month they turn 16 years old.

If the employee earns the minimum earnings threshold or more, you have to pay contributions for them. If the employee earns less than the minimum earnings threshold you do not have to pay contributions for them.

Married woman's election

Some married women can choose not to pay contributions by applying for a married woman’s election. If they divorce they must start paying contributions from the first of the month following the date of the decree absolute. 

The employee must:

• tell us she’s divorced
• provide the date of the decree absolute
• exchange her current red (XR1) registration card for a blue (FR1) registration card
  

You must start deducting primary contributions from their wages once you have sight of their new registration card.

You should keep a copy of the new card with a copy of their photographic ID.

Married woman's election