National Insurance contributions
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Class 1 (Employees)
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Contracted In
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Contracted Out
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Employee contributions
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Salary Related
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Money Purchase
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- on earnings between £139.01 - £770pw
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12.0%
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10.4%
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10.4%
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- on earnings between £770.01 - £817pw
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12.0%
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12.0%
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12.0%
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- on earnings above £817pw
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2.0%
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2.0%
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2.0%
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Employer contributions
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- on earnings between £136.01 and £770pw
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13.8%
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10.1%
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12.4%
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- on earnings above £770pw
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13.8%
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13.8%
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13.8%
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Employer contributions (at 13.8%) are also due on most taxable benefits and on tax paid on an employee's behalf under a PAYE settlement agreement.
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Class 2 (Self-employed)
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Flat rate per week
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2.50
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Small earnings exception: profits per annum
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5,315
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Class 3 (Voluntary)
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Flat rate per week
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12.60
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Class 4 (Self-employed)
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On profits £7,225 - £42,475
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9.0%
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On profits over £42,475
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2.0%
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From September 2010, there is a "holiday" from employer's NIC for new businesses employing up to 10 new employees (including directors) in their first year. The maximum benefit is £5,000 per employee. Businesses in certain areas, such as London and the SE, are excluded.
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