National insurance

Earnings thresholds and contribution percentages for Class 1 (employed), Class 2 and 4 (self-employed) and Class 3 (voluntary) national insurance contributions.

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.

Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate of 13.8% 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

2021/22:

Earnings per week %
Up to £184 Nil
£184.01 - £967 12
Over £967 2

Entitlement to state pension and other 'contribution-based benefits' is retained for earnings between £120 and £184 per week

2020/21:

Earnings per week %
Up to £183 Nil
£183.01 - £962 12
Over £962 2

Entitlement to state pension and other 'contribution-based benefits' is retained for earnings between £118 and £166 per week

Employers

2021/22:

Earnings per week %
Up to £170 Nil
Over £170 13.8

2020/21:

Earnings per week %
Up to £169 Nil
Over £169 13.8

Other National Insurance payable by employers

Class 1A

13.8% on broadly all taxable benefits provided to employees and on certain taxable termination and sporting testimonial payments in excess of £30,000.

Class 1B

13.8% on taxable 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.

2021/22:

Class 2 (£)
Flat rate per week 3.05
Small Profits Threshold (per year) 6,515

2020/21:

Class 2 (£)
Flat rate per week 3.05

Small Profits Threshold (per year)

6,475

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

2021/22:

Annual profits %
Up to £9,568 Nil
£9,568.01 - £50,270 9
Over £50,270 2

2020/21:

Annual profits %
Up to £9,500 Nil
£9,500.01 - £50,000 9
Over £50,000 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: £15.40 (2020/21: £15.30)


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