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- If you're employed, National Insurance is automatically deducted from your monthly pay. If you're self-employed, you'll need to organise these contributions yourself, usually through your self-assessment tax return.
www.which.co.uk/money/tax/national-insurance/national-insurance-rates-aaim75D42Gfi
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What are National Insurance Contributions (NICs) & how do they work?
Payment of NICs qualifies individuals to receive certain social security benefits (most notably the state pension). In practice, however, the link between contributions paid and benefits received is vanishingly weak and NICs essentially act as a second income tax.
- 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
The amounts deducted and paid depend on: the employee’s National Insurance category letter. how much of the employee’s earnings falls within each band. Employee National Insurance rates....
Mar 3, 2021 · Income tax and National Insurance contributions. The government will maintain the income tax Personal Allowance and higher rate threshold and National Insurance contributions Upper...
National Insurance contributions are not deductible when working out your taxable income for either the employed or self-employed. Some expenses which may be deductible for tax purposes are not deductible for National Insurance purposes (for example, certain self-funded employment expenses).
Apr 5, 2024 · National Insurance is worked out in a similar way to income tax and is calculated on gross earnings (before tax or pension deductions) or profits (earnings minus allowable expenses) above a threshold.
Apr 5, 2024 · If you're an employee, National Insurance will be deducted from your salary before you receive it, along with any income tax. You can work out your deductions with our income tax calculator. If you're self-employed, you'll usually need to pay via your self-assessment tax return.
