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 – £967 | 12 |
| Over £967 | 2 |
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 £175 | Nil |
| Over £175 | 13.80 |
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 – 2023/24
| 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 £12,570 | Nil |
| £12,570.01 – £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 – 2023/24
Flat rate per week £17.45