National Insurance Contributions (NIC) – Rates and Allowances

  • Employees start paying Class 1 NIC from age 16 (if sufficient earnings).
  • Employers pay Class 1 NIC in accordance with the table below.
  • Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate of 13.8% to 0% up to the Upper Secondary Threshold.
  • Employees' Class 1 NIC stop when they reach their State Pension age1. The employer's contribution continues.

Employees - Class 1 - 2020/21

Earnings per week%
Up to £183Nil
£183.01 - £96212
Over £9622

Entitlement to state pension and other contribution-based benefits2 is retained for earnings between £120 and £183 per week.

Employers - Class 1 - 2020/21

Earnings per week%
Up to £169Nil
Over £16913.8
Upper Secondary Threshold (for under 21s and apprentices under 25) 
Up to £962
0%

Other National Insurance payable by employers

Class 1A - 13.8% on broadly all taxable benefits provided to employees and on certain taxable termination payments in excess of £30,000

Class 1B - 13.8% on taxable PAYE Settlement Agreements

Self-employed - Class 2 and 4

  • A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits)
  • Class 2 NIC stop when a person reaches State Pension age
  • Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.

Self-employed - Class 2 - 2020/21

Flat rate per week£3.05
Small Profits Threshold£6,475 per year

No Class 2 is due if the amount of trading profits assessable to income tax and Class 4 NIC is below this figure. However, a person might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and entitlement to other benefits.  

Class 4 - 2020/21

Annual profits%
Up to £9,500Nil
£9,500.01 - £50,0009
Over £50,0002

Class 3

  • A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.
  • Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.

Class 3 - 2020/21

Flat rate per week £15.30

1 State Pension age: The age at which an individual is entitled to receive the basic state pension.

2 Contribution-based benefits: State benefits that are linked to an individual's National Insurance contributions. The main ones are Statutory Sick Pay and Statutory Maternity Pay.

  • Employees start paying Class 1 NIC from age 16 (if sufficient earnings).
  • Employers pay Class 1 NIC in accordance with the table below.
  • Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate of 13.8% to 0% up to the Upper Secondary Threshold.
  • Employees' Class 1 NIC stop when they reach their State Pension age1. The employer's contribution continues.

Employees - Class 1 - 2019/20

Earnings per week%
Up to £166Nil
£166.01 - £96212
Over £9622

Entitlement to state pension and other contribution-based benefits2 is retained for earnings between £118 and £166 per week.

Employers - Class 1 - 2019/20

Earnings per week%
Up to £166Nil
Over £16613.8
Upper Secondary Threshold (for under 21s and apprentices under 25) 
Up to £962
0%

Other National Insurance payable by employers

Class 1A - 13.8% on broadly all taxable benefits provided to employees

Class 1B - 13.8% on PAYE Settlement Agreements

Self-employed - Class 2 and 4

  • A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits)
  • Class 2 NIC stop when a person reaches State Pension age
  • Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.

Self-employed - Class 2 - 2019/20

Flat rate per week£3.00
Small Profits Threshold£6,365 per year

No Class 2 is due if the amount of trading profits assessable to income tax and Class 4 NIC is below this figure. However, a person might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and entitlement to other benefits.

Class 4 - 2019/20

Annual profits%
Up to £8,632Nil
£8,632.01 - £50,0009
Over £50,0002

Class 3

  • A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.
  • Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.

Class 3 - 2019/20

Flat rate per week £15.00

1 State Pension age: The age at which an individual is entitled to receive the basic state pension.

2 Contribution-based benefits: State benefits that are linked to an individual's National Insurance contributions. The main ones are Statutory Sick Pay and Statutory Maternity Pay.