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National Insurance

National Insurance is due on earnings for employees and self-employed workers. There are different Classes of National Insurance applicable to different income types.

National Insurance

Applies to anyone aged 16 or over and under state pension age:-

Self Employed individual 2017/18 2016/17
Class 2 Flat Rate (per week) £2.85 £2.80
Class 4 @ 9% on profits between £8,164-£45,000 £8,060-£43,000
Class 4 @ 2% on profits in excess of £45,000 £43,000
  • Class 2 and Class 4 National insurance is collected as part of the self-assessment tax liability.
  • Class 2 National Insurance stops when a person reaches State Pension age.
  • Class 2 National Insurance is due when self-employed profits exceed £6,025 per year (£5965 in 2016/17)
  • Class 4 National Insurance liability ceases from the start of the tax year after the one in which the person reaches State Pension age.

Employed individual

Employed individual 2017/18 2016/17
No NI on earnings up to (per week) £157* £155*
At 12% on earnings between (per week) £157-£866 £155-827
At 2% on earnings in excess of (per week) £866 £827
  • *Entitlement to state pension and other contribution based benefits is retained for earnings between £113 and £157 per week. (£112 and £155/156 per week 2016/17)
Employer NI is due at 13.8% on employee earnings in excess £157 £156

NOTE:

  • Employment Allowance available to cover first £3000 of Employer National Insurance contributions due (From 6 April 2016, no Employment Allowance is available to an employer whose only employee is a director.)
  • Employer National Insurance is not due for Employees aged 21 or under.
  • From 6 April 2016, no Employer NI due for employees who are apprentices and aged under 25.
  • Class 3 National Insurance can be paid on a voluntary basis to fill gaps in a person’s National Insurance record in order to qualify for full State Pension.


You can check your National Insurance record by following the guidance here >