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National Insurance contributions explained. National Insurance contributions (NICs) are the UK’s second-biggest tax, expected to raise just under £170 billion in 2024–25 – around a sixth of all tax revenue. They are paid by employees and the self-employed on their earnings, and by employers on the earnings of those they employ.
- If you’re employed
- If you’re self-employed
- If you’re employed and self-employed
- Directors, landlords and share fishermen
You pay Class 1 National Insurance contributions.
The Class 1 National Insurance rates for most people for the 2023 to 2024 tax year are:
You’ll pay less if:
•you’re a married woman or widow with a valid ‘certificate of election’
•you’re deferring National Insurance because you’ve got more than one job
Employers pay a different rate of National Insurance depending on their employees’ category letters.
You pay Class 2 and Class 4 National Insurance, depending on your profits. Most people pay both through Self Assessment.
If your profits are from £6,725 to £12,570 a year, your contributions are treated as having been paid to protect your National Insurance record.
You may be able to pay voluntary contributions to avoid gaps in your National Insurance record if you:
•have profits of less than £6,725 a year from your self-employment
•have a specific job (such as an examiner or business owner in property or land) and you do not pay Class 2 National Insurance through Self Assessment
If you have gaps and do not pay voluntary contributions, this may affect the benefits you can get, such as the State Pension.
You might be an employee but also do self-employed work. In this case your employer will deduct your Class 1 National Insurance from your wages, and you may have to pay Class 2 and 4 National Insurance for your self-employed work.
How much you pay depends on your combined wages and your self-employed work. HMRC will let you know how much National Insurance is due after you’ve filed your Self Assessment tax return.
There are different National Insurance rules if you’re a:
•director of a limited company
•landlord running a property business
•share fisherman, for example you’re working on a British fishing boat but not under a contract of service
4 days ago · 2%. 3.25%. 2%. For 2023 to 2024 and 2022 to 2023, the National Insurance contributions rates for directors are different. Read CA44 to find out more about rates for directors. 3. Class 2 and Class ...
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- You can pay voluntary National Insurance to fill or avoid gaps in your record.If you’re paying voluntary contributions for the previous 2 tax years...
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report it on form P11D add the value of the benefit to the employee’s earnings when deducting and paying Class 1 National Insurance (but not PAYE tax) through payroll You reimburse your employee ...
National Insurance is a tax on earnings and self-employed profits. You normally start paying when you turn 16 and earn over a certain amount. Your National Insurance contributions (NICs) decide: if you qualify for certain benefits, like: State Pension. Maternity Allowance, and. Jobseeker’s Allowance.
Apr 6, 2024 · National Insurance contributions. You pay NIC if you are: either employed or self-employed; and. aged 16 or over but below state pension age. The amount of NIC you pay depends on how much you earn. NIC is only payable on earnings (that is, income from working), not on investment income such as bank interest, pension income or rental income.
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This threshold increases to £242 per week from 5 July 2022. At higher levels of earnings, above £190/£242 but less than £967, you pay National insurance at a fixed percentage on your earnings (13.25%). For earnings above this level, you pay a small National Insurance charge (3.25%) on the additional earnings.
