NI Contributions
- Employees start paying Class 1 NIC from age 16 (if sufficient earnings).
- Employers pay Class 1 NIC in accordance with the table below.
- Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate of 15.05% to 0% up to the Upper Secondary Threshold of £967 per week. Also applies to veterans in the first 12 months of employment.
- Employees’ Class 1 NIC stop when they reach their State Pension age. The employer’s contribution continues.
Employees – Class 1 – 2022/23
| Earnings per week | % |
|---|---|
| Up to £190* | Nil |
| £190.01 – £967 | 13.25 |
| Over £967 | 3.25 |
* £242 from 6 July 2022
Entitlement to state pension and other contribution-based benefits is retained for earnings between £123 and £190* per week.
Employers – Class 1 – 2022/23
| Earnings per week | % |
|---|---|
| Up to £175 | Nil |
| Over £175 | 15.05 |
Other National Insurance payable by employers
Class 1A – 15.05% on broadly all taxable benefits provided to employees and on certain taxable termination and sporting testimonial payments in excess of £30,000
Class 1B – 15.05% on taxable PAYE Settlement Agreements
Self-employed – Class 2 and 4
- A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits)
- Class 2 NIC stop when a person reaches State Pension age
- Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.
Self-employed – Class 2 – 2022/23
| Flat rate per week | £3.15 |
| Small Profits Threshold | £6,725 per year |
| Lower Profits Limit | £11,908 |
For 2022/23 the point at which the self-employed person starts to pay Class 2 NICs will increase to £11,908. This means those with profits between the Small Profits Threshold and the Lower Profits Limit will not pay Class 2 NICs, but will still be able to access entitlement to contributory benefits. A self-employed person with profits below the Small Profits Threshold might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and other benefits.
Class 4 – 2022/23
| Annual profits | % |
|---|---|
| Up to £11,908 | Nil |
| £11,908.01 – £50,270 | 10.25 |
| Over £50,270 | 3.25 |
Class 3
- A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.
- Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.
Class 3 – 2022/23
Flat rate per week £15.85
- Employees start paying Class 1 NIC from age 16 (if sufficient earnings).
- Employers pay Class 1 NIC in accordance with the table below.
- Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate of 13.8% to 0% up to the Upper Secondary Threshold of £967 per week. Also applies to veterans in the first 12 months of employment.
- Employees’ Class 1 NIC stop when they reach their State Pension age . The employer’s contribution continues.
Employees – Class 1 – 2021/22
| Earnings per week | % |
|---|---|
| Up to £184 | Nil |
| £184.01 – £967 | 12 |
| Over £967 | 2 |
Entitlement to state pension and other contribution-based benefits is retained for earnings between £120 and £184 per week.
Employers – Class 1 – 2021/22
| Earnings per week | % |
|---|---|
| Up to £170 | Nil |
| Over £170 | 13.8 |
Other National Insurance payable by employers
Class 1A – 13.8% on broadly all taxable benefits provided to employees and on certain taxable termination and sporting testimonial payments in excess of £30,000
Class 1B – 13.8% on taxable PAYE Settlement Agreements
Self-employed – Class 2 and 4
- A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits)
- Class 2 NIC stop when a person reaches State Pension age
- Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.
Self-employed – Class 2 – 2021/22
| Flat rate per week | £3.05 |
| Small Profits Threshold | £6,515 per year |
No Class 2 is due if the amount of trading profits assessable to income tax and Class 4 NIC is below this figure. However, a person might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and other benefits.
Class 4 – 2021/22
| Annual profits | % |
|---|---|
| Up to £9,568 | Nil |
| £9,568.01 – £50,270 | 9 |
| Over £50,270 | 2 |
Class 3
- A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.
- Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.
Class 3 – 2021/22
Flat rate per week £15.40
© This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.