• 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. • Employees' Class 1 NIC stop when they reach their State Pension age. The employer's contribution continues.

Employees - Class 1 - 2017/18

Earnings per week
 %
 Up to £157
 Nil*
 £157.01 - £866
 12
 Over £866
 2

* Entitlement to state pension and other contribution-based benefits is retained for earnings between £113 and £157 per week.

Employers - Class 1 - 2017/18

Earnings per week                                                                                                                                                  
 %
Up to £157
                       Nil                        
Over £157
 13.8
Upper Secondary Threshold (for under 21s and apprentices under 25)
Up to £866
 0

Other National Insurance payable by employers

Class 1A - 13.8% on broadly all taxable benefits provided to employees
Class 1B - 13.8% on PAYE Settlement Agreements

Self-employed - Class 2 and 4

• 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.

Self-employed - Class 2 - 2017/18

Flat rate per week
 £2.85
Small Profits Threshold*                                                      
 £6,025 per year

* 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 - 2017/18

Annual profits
    %
Up to £8,164
 Nil
£8,164.01 - £45,000
 9
Over £45,000
 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.

Class 3 - 2017/18

Flat rate per week £14.25

 

Disclaimer

This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.