National Insurance Contributions

National Insurance Contributions 2016/2017 Class 1- Employed

Employees (and therefore employers) start paying Class 1 NIC from when an employee is 16 or over (if sufficient earnings).

Employees Class 1 NIC stop when they reach their State Pension age. ( the date they are entitled to receive the basic state pension). The employers contribution continues,

Most employees pay ‘contracted in’ rates i.e. the employee will accrue entitlement to the basic state pension and Additional State Pension. This is an extra amount of money an individual may receive in addition to the basic State Pension. It’s based on National Insurance contributions that have been paid

Employee’s Contribution Employer’s Contribution
Earnings in range Contribution Table A Contribution Table B Contribution Table C Contribution Table D
 Up to £112pw (£663pm) Nil Nil  Nil Nil
 £112.01 – £155pw Nil Nil  Nil Nil
 £155.01 – £827pw  12%  5.85%  Nil Nil
 Over £827.01pw  2%  2%  Nil Nil
The reduced rate payable by certain married women and widows will remain 5.85% between the Primary Threshold and the Upper Earnings Limit (£112.01 and £155 a week for 2016/17),plus 2% on earnings above the Upper Earnings Limit.
Class 1A (employers only) : 13.8% based on taxable benefits excluding childcare
Class 1B (employers only) : 13.8% in respect of amounts in PAYE settlement agreement
Class 2 – self-employed flat rate: £2.80 per week if earnings are over £5,965pa. The special rate for Share Fishermen £3.40 per week and that for Volunteer Development workers £5.55 per week.
Class 3 – Voluntary: £14.10 per week
Class 3A – Voluntary: which those reaching State Pension age by 5 April 2016 will be able to pay to increase their entitlement to an Additional Pension (SERPS/S2P), will not be available until October 2015.
Class 4* – Self-employed: 9% on profits between £8,000 and £43,000pa, 2% over £43,000pa
*Exemption applies if state retirement age was reached by 6 April 2016