National Insurance is due on earnings for employees and self-employed workers. There are different Classes of National Insurance applicable to different income types.
Self Employed individual
Applies to anyone aged 16 or over and under state pension age:-
|Self Employed individual||2019/20||2018/19|
|Class 2 Flat Rate (per week)||£3.00||£2.95|
|Class 4 @ 9% on profits between||£8,632 – £50,000||£8,424 – £46,350|
|Class 4 @ 2% on profits in excess of||£50,000||£46,350|
- 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 £6,365 per year (£6,025 in 2018/19)
- Class 4 National Insurance liability ceases from the start of the tax year after the one in which the person reaches State Pension age.
|No NI on earnings up to (per week)||£166*||£162|
|At 12% on earnings between (per week)||£166 – £962||£162-£892|
|At 2% on earnings in excess of (per week)||£962||£892|
- *Entitlement to state pension and other contribution based benefits is retained for earnings between £118 and £166 per week. (£116 and £162 per week 2018/19)
|Employer NI is due at 13.8% on employee earnings in excess of||£166||£162|
- Employment Allowance available to cover first £3,000 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, there is no Employer NI due for employees who are apprentices and aged under 25 up to the upper secondary threshold of £962 per week.
- 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
- If you wish to look into the Employment Allowance in closer detail then please click the link > Employment Allowance