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National Insurance contributions (NIC) – rates and allowances

  • 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 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 – 2023/24

EARNINGS PER WEEK%
Up to £242*Nil
£242.01 – £96712
Over £9672

Entitlement to state pension and other contribution-based benefits is retained for earnings between £123 and £242 per week.

EMPLOYERS – CLASS 1 – 2023/24

EARNINGS PER WEEK%
Up to £175Nil
Over £17513.80

 

OTHER NATIONAL INSURANCE PAYABLE BY EMPLOYERS

Class 1A – 13.8% on broadly all taxable benefits provided to employees and on certain taxable termination 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 – 2022/23

Flat rate per week£3.45
Small Profits Threshold£6,725 per year
Lower Profits Limit£12,570

For 2023/24 the point at which the self-employed person starts to pay Class 2 NICs is £12,570. 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 – 2023/24

ANNUAL PROFITS%
Up to £12,570Nil
£12,570.01 – £50,2709
Over £50,2702

 

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 – 2023/24

Flat rate per week £17.45