hmrc

Female Employees Pay Less National Insurance

 20 Jun 2017

Payroll For Female Employees - Paying Less National Insurance

If you have hired a female employee, and she gives you a “certificate of election”, it means that she may be able to pay less national insurance. Until 1977, women had a choice to pay less National Insurance. Even if your employee opted in before the expiry of the scheme, she can keep paying it at a reduced rate.

In order to check the entitlement of your female employee, you should accept one of the following forms:

  • CA4139
  • CF383
  • CF380A (if your employee has been working for you continuously since 5th of April 1980.)

If the employee doesn’t have her certificate, she can apply for one by sending a completed CF9 form (if she is married) or a CF9A (if she is a widow) to HM Revenues and Customs. Also, if your employee is entitled to pay less National Insurance, it is your responsibility to put the right National Insurance category letter in the record of her payroll. Use “B” or “E” in case she is in a contracted-out workplace pension scheme that you run.

Your female employee should inform you as soon as possible if she gives up or loses the right to pay less National Insurance. In case her husband dies, she still has an option of keeping her right to pay reduced contributions for a specific period of time. However, she should call the National Insurance helpline in such cases.

If your employee stops paying less National Insurance, you have the following responsibilities to take care of:

  • You have to return the certificate of your employee
  • You should change the National Insurance category letter in your payroll software – usually from “A” to “D”
  • You should enter her details in the new Full Payment Submission (FPS). You should also show year-to-date total's for both the category letters if your employee changed the rate in the middle of the financial year.

Also, your employee has the following obligations:

  • She has to complete Part 1 of the certificate of election and return it to the National Insurance Contributions and Employer Office
  • Complete and send either a completed CF9 form (if she is married) or a CF9A form (if she is a widow)

Thus, the female employees working for you have certain exemptions and benefits which you should be aware about. You need to take care of these benefits and add them to your records as soon as the employee is hired.

Also, you should keep a check on the details and keep updating them in case of any changes or alterations. You should always make sure that your employee has to worry the least when it comes to her financial matters. You should also inform the same to the financial institution that is providing the workplace pension scheme to your employees. In case of any doubt you can always approach HMRC and get proper guidance as to how to go ahead with the benefit calculations and maintaining proper records about the employees.