National Insurance Contributions (NICs)
Payable on weekly earning of
Below £112 (lower earnings limit)
£112 to £115 (primary threshold)
Below £156 (seconday threshould)
£155.01 – £827 (upper earnings limit)
£156.01 – £827 (upper secondary threshould (UST) for under 21s)
£156.01 – £827 (apprentice upper secondary threshould (AUST) for under 21s)
*No NICs are actually payable but a notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement.
**Over state pension age, the employee contribution is generally nil.
Employment allowance up to £3,000 (per year)
Class 1A On relevant benefits 13.8%
Class 2 Self employed £2.80 per week
Small profits threshould £5.965 per annum
Class 3 Voluntary £14.10 per week
Class 3A Voluntary contributions may be available to 5 April 2017 in order to obtain extra additional State Pension (maximum £25 a week) – variable contribution rates according to age.
Class 4 Self employed on annual profits
£8,060 – £43,000 9%*
Excess over £43,000 2%*
* Exemption applies if state pension age was reached by 6 April 2016.
Changes to the Employment Allowance
From April 2016 the annual Employment Allowance for employer NICs increases from £2,000 to £3,000. However, companies where the director is the sole employee will no longer be able to claim this allowance.
It was announced that from April 2018, Class 2 NICs will be abolished, and a reform of Class 4 NICs will be undertaken.
From April 2018, employer NICs will be due on termination payments above £30,000 that are already subject to income tax.
The first £30,000 of a termination payment will remain exempt from income tax and the full payment will be outside the scope of employee NICs.