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||2021/22||2020/21|
|Class 2 Flat Rate (per week)||£3.05||£3.05|
|Class 4 @ 9% on profits between||£9,568 – £50,270||£9,500 – £50,000|
|Class 4 @ 2% on profits in excess of||£50,270||£50,000|
- 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 £6,515 per year (£6,475 in 2020/21)
- 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)||£184||£183|
|At 12% on earnings between (per week)||£184 – £967||£183-962|
|At 2% on earnings in excess of (per week)||£967||£962|
- *Entitlement to state pension and other contribution based benefits is retained for earnings between £120 and £184 per week.
|Employer NI is due at 13.8% on employee weekly earnings in excess of||£170||£169|
- Employment Allowance available to cover first £4,000 of Employer National Insurance contributions due (Since 6 April 2020, the Employment Allowance has not been available to employers whose only employee is a director).
- Since 6 April 2020 the Employment Allowance has been considered under State Aid rules.
- 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 £967 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