National Insurance Contributions
Class 1 (Employees)
| Employee | Employer | |
|---|---|---|
| Main NIC rate | 8% | 13.8% |
| No NIC on first | £242pw | £175pw |
| Main rate charged up to* | £967pw | no limit |
| 2% rate on earnings above | £967pw | N/A |
| Employment allowance per business** | N/A | £5,000 |
*Nil rate of employer NIC on earnings up to £967pw for employees aged under 21, apprentices aged under 25 and ex-armed forces personnel in their first twelve months of civilian employment.
**Some businesses do not qualify, including certain sole director companies and employers who have an employer’s Class 1 NIC liability of £100,000 or more for 2023/24.
Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).
Class 2 (Self employed)
| Flat rate per week if profits below £6,725 (voluntary) | £3.45 |
Class 3 (Voluntary)
| Class3: Flat rate per week | £17.45 |
Class 4 (Self employed)
| On profits £12,570 – £50,270 | 6% |
| On profits over £50,270 | 2% |
Employees with earnings above £123pw and the self-employed with profits over £6,725 (or who pay voluntary Class 2 contributions) can access entitlement to contributory benefits.