National insurance contributions

National insurance contributions and rates in 2016/17

Employee   Employer  
Earnings per week   Earnings per week  
Up to £112                         Nil* Up to £156                        0%
From £112.01 to £155                    0% Over £156                       13.8%*
From £155.01 to £827  12% Over state retirement age    13.8%
Over £827                          2%   
Over state retirement age      0%                                       

*0% for employees under 21 and apprentices under 25 on earnings up to £827 per week.

Employment allowance

* Entitlement to contribution-based benefits retained for earnings between £112 and £155 per week

** The rate is 0% in relation to employees under 21 and apprentices under 25 on earnings up to £827 per week

*** Per employer, per year. One claim only for companies in a group or under common control. Not available if the only paid employee is a director.

Class 1A (on relevant benefits) 13.8%
   
Class 1B (on PAYE settlement arrangement) 13.8%  
   
Class 2 (self employed) £2.80 per week
Class 2 contributions - share fishermen £3.45 per week
Class 2 contributions - volunteer development workers £5.60 per week
Small profits threshold £5,965 per annum
Contributions cease at state retirement age  
Class 3 (voluntary) £14.10 per week
   
Class 4* (Self employed on profits)  
£8,060 to £43,000 9%
Above £43,000 2%
*Exemption applies if state retirement age was reached by 6 April 2016.
   
Maximum contributions  
Class 1 £4,197.60 + 2% of earnings over £43,000 pa.
Class 2 and Class 4 £3,278.15 + 2% of profits over £43,000 pa.

 

Notes

  1. For children under 16, and employees over state pension age there are no national insurance contributions payable, but employers' contributions remain payable.
  2. No employers national insurance contributions are payable for those under 21, or 25 for an apprentice.

2017 and beyond

The government has announced that Class 2 national insurance contributions will be abolished from April 2017. At the same time the Class 4 will be reformed to introduce a new contributory benefit test.

Did you know?

The Treasury is expecting to raise £126.5 billion (2015/16 - £114.9 billion) from national insurance contributions.