National insurance contributions

Employment allowance

From April 2014, eligible businesses, charities and CASCs will be entitled to an annual 'employment allowance' of £2,000 to reduce their liability for class 1 secondary national insurance contributions.

National insurance contributions and rates in 2014/15

Class 1 (not contracted out) Employer Employee
Lower earnings limit  n/a £111
Payable on weekly earnings    
£111.01-£153 n/a 0%
£153.01 - £805 13.8% 12%
Over £805 13.8% 2%
Payable on monthly earnings    
£481 - £663 n/a 0%
£663.01 - £3,489 13.8% 12%
Over £3,489 13.8% 2%
Over state retirement age 13.8% n/a
Class 1A (on relevant benefits) 13.8% n/a
   
Class 1B (on PAYE settlement arrangement) 13.8%  
   
Class 2 (self employed) £2.75 per week
Class 2 contributions - share fishermen £3.40 per week
Class 2 contributions - volunteer development workers £5.55 per week
Limit of net earnings for exception £5,885 per annum
Contributions cease at state retirement age  
Class 3 (voluntary) £13.90 per week
   
Class 4* (Self employed on profits)  
£7,956 to £41,865 9%
Above £41,865 2%
*Exemption applies if state retirement age was reached by 6 April 2014.
   
Maximum contributions  
Class 1 £4,146.71 + 2% of earnings over £41,865 pa.
Class 2 and Class 4 £3,197.56 + 2% of profits over £41,865 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