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National insurance

Class 1

Employees start paying Class 1 NIC from age 16 (if sufficient earnings).

Employers pay Class 1 NIC in accordance with the table below.

From 6 April 2016 employer NIC for apprentices under the age of 25 is reduced from the normal rate of 13.8% to 0%.

Employees Class 1 NIC stop when they reach their ‘State Pension age’. The employer’s contribution continues.

Employees

2016/17:

Earnings per week %
Up to £155 Nil 1
£155.01 – £827 12
Over £827 2

Note…

  1. Entitlement to state pension and other ‘contribution-based benefits’ is retained for earnings between £112 and £155 per week

2015/16:

Earnings per week %
Up to £155 Nil 1
£155.01 – £815 12
Over £815 2

Note…

  1. Entitlement to state pension and other ‘contribution-based benefits’ is retained for earnings between £112 and £155 per week.

Employers

2016/17:

Earnings per week %
Up to £156 Nil
Over £156 13.8
Upper Secondary Threshold (for under 21s and apprentices under 25)
Up to £827
0

2015/16:

Earnings per week %
Up to £156 Nil
Over £156 13.8
Upper Secondary Threshold (for under 21s)
Up to £815
0

Other National Insurance payable by employers

Class 1A

13.8% on broadly all taxable benefits provided to employees.

Class 1B

13.8% on PAYE Settlement Agreements.

Class 2 and 4 (self-employed)

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.

2016/17 and 2015/16

Class 2 (£)
Flat rate per week 2.80
Small Profits Threshold (per annum) 1 5,965

Note…

  1. 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 entitlement to other benefits.

Class 4

2016/17:

Annual profits %
Up to £8,060 Nil
£8,060.01 – £43,000 9
Over £43,000 2

2015/16:

Annual profits %
Up to £8,060 Nil
£8,060.01 – £42,385 9
Over £42,385 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.

Flat rate per week: £14.10 (2016/17 and 2015/16)