1. Tax Advice
  2. UK National Insurance

UK National Insurance

National Insurance Contributions (NIC)
 

National Insurance is the name given to the UK’s social security contribution fund. National Insurance (NI) contributions are paid by employees and the self-employed who are over 16 years of age and earning over a certain threshold.

For the 2017-2018 tax year, you will pay NI contributions if:

  • an employee earning above £157 a week
  • self-employed and making a profit of £6,025 or more a year

National Insurance Classes

There are different types of National Insurance, referred to as classes, and the class that applies to you depends on your employment status and how much you earn, and whether you have any gaps in your National Insurance record.

Employees

Subject to Class 1 National Insurance (Primary contributions are paid by the employee and Secondary contributions are paid by the employer).

Self-Employed

Subject to Class 2 and Class 4 National Insurance Contributions, depending on profits.

NIC Rates (2017/2018)

The rates for National Insurance Contributions are currently:

Class 1 Primary Contributions:

  • 12% on earnings between £680 and £3,750 per month and 2% on earnings thereafter.

Class 1 Secondary Contributions:

  • Depends on how employees are categorised, but typically 13.8% on earnings above £680 per month.

Class 2 Contributions:

  • £2.85 per week

Class 4 Contributions:

  • 9% on annual self-employed profits between £8,164 and £45,000 and 2% on profits thereafter.

People who are absent from the UK but wish to maintain their contributions records may also make voluntary Class 3 contributions of £14.25 per week.

Note, for temporary residents in the UK, it is not possible to arrange a reimbursement of national insurance contributions, but those who have spent a considerable period in the UK may have an entitlement to a UK state pension. The entitlement may also be increased by making additional voluntary contributions as indicated above.

Note also that employees on properly structured assignments into the UK may not attract National Insurance Contributions, but any employer seeking to utilize this form of assignment should seek professional tax advice via our Inquiry Form.

Complete the Inquiry form