National Insurance

Contribution classes

Class 1 - payable on employment earnings. Class 1 primary contributions are payable by the employee on their earnings at the rates shown in the table below, and Class 1 secondary are paid by the employer. The contributions are payable and accountable for under the PAYE system.
Class 1A - payable by employers only on the value of benefits in kind provided to its employees. The rate is the same as the main Class 1 (secondary) rate. Contributions are payable by 19 July following the end of the tax year to which they relate.
Class 1B - effectively the same as Class 1A contributions, and payable at the same rate as secondary contributions except that they apply where the employer pays the tax liability usually due from an employee on benefits in kind. Class 1B NI is payable by 19 October after the tax year.
Class 2 - payable by the self-employed at the flat rate shown in the table below. If their profit is below the “small earnings exception” limit, an exception from paying Class 2 can be applied for. From 2022/23 onward, an effective 0% will apply to profits that exceed the small earnings exception, but don’t exceed the Class 4 lower profits limit. Self-employed taxpayers with profits falling into this band will not need to make payment, but will accrue entitlement to various state benefits, including the state retirement pension.
Compulsory Class 2 NI contributions (the fixed rate paid by the self-employed) will be abolished altogether. This will not affect the right to contributory benefits for individuals with profits exceeding the small profits threshold (£12,570 for 2024/25), including the state pension. This change reduces NI contributions by £180 per annum.
For individuals whose annual profits are below the small profits threshold, it will still be possible to pay Class 2 voluntarily, i.e. to accumulate contributory benefits.
Class 3 - voluntary contributions payable at a flat rate as shown in the table below. Contributions of this class can be paid by individuals who wish to top up their contribution record.
Class 4 - payable by the self-employed at the rates shown in the table below. The amount payable is profit related. Contributions at the full rate don’t apply to profits in excess of the “upper profits limit”. The rate of contribution is 2.73% of all profits above this limit for 2022/23 following the fiscal event on 23 September 2022.

Notes on Class 1 contributions:

Spring Budget 2024. From 6 April 2024 the main rates of Primary Class 1 is cut to 8% and Class 4 to 6%.
With exceptions employers are entitled to deduct employment allowance from their (annual) employers’ NI liability. Since 6 April 2022 the allowance is £5,000 per tax year. Exceptions are companies with a single director and no other employees and employers engaging personnel for personal, household or domestic work, employers already claiming the allowance through a connected employer.
Since 6 April 2015 the pay of an employee aged 20 or under is not liable to employers’ NI contributions on their pay. The exemption only applies to earnings up to the upper secondary threshold, which since 2015/16 has been set at the same level as the NI upper earnings limit.
Since 6 April 2016 employers do not have to pay secondary NI contributions for apprentices aged under 25 on wages up to the upper earnings limit.

Description	2022/23	2023/24	2024/25
Lower earnings limit, primary Class 1 (per week)	£123	£123	£123
Upper earnings limit, primary Class 1 (per week)	£967	£967	£967
Primary threshold (per week)	£190/£242*	£242	£242
Secondary threshold (per week)	£175	£175	£175
Upper secondary threshold for under 21s (per week)	£967	£967	£967
Apprentice upper secondary threshold for under 25s	£967	£967	£967
Employees up to the primary threshold and employers up to the secondary threshold.	0%	0%	0%
Employees’ Class 1 rate between primary threshold and upper earnings limit	13.25%/12%**	12%/10%***	8%
Employees’ Class 1 rate above upper earnings limit	3.25%/2%**	2%	2%
Married women’s reduced rate between primary threshold and upper earnings limit	7.1%/5.85%**	5.85%/3.85%***	1.85%
Married women’s rate above upper earnings limit	3.25%/2%**	2%	2%
Employer’s secondary Class 1 rate above secondary threshold	15.05%/13.8%**	13.8%	13.8%
Class 2 rate (per week)	£3.15	£3.45	£3.45
Class 2 small earnings exception (per year)	£6,725 (0% rate applies to profits in excess of this, but below £11,908)	£6,725	£6,725
Class 3 rate (per week)	£15.85	£17.45	£17.45
Class 4 lower profits limit (per year)	£11,908	£12,570	£12,570
Class 4 upper profits limit (per year)	£50,270	£50,270	£50,270
Class 4 rate between lower profits limit and upper profits limit	10.25%/9%**	9%	6%
Class 4 rate above upper profits limit	3.25%/2%**	2%	2%

* Directors are subject to an annual payment period by default, so the equivalent annual threshold for 2022/23 is £11,908, i.e. 13 weeks at £190 and 39 weeks at £242.

** The Mini Budget on 23 September 2022 reduced the rates of Class 1 and Class 4 NI by 1.25%. The rates shown are those applicable both before and after 6 November 2022.

*** The rate of employees’ Class 1 NI was reduced from 12% to 10% with effect from 6 January 2024. The special rate for married women reduced to 3.85% from the same date. For employees including directors whose contributions are calculated on an annual basis a rate of 11.5% applies to earnings for 2023/24.

NI break for employers with young workers

Since 6 April 2015 the pay of an employee aged 20 or under is not liable to employer’s NI contributions on their pay. The exemption only applies to earnings up to the upper secondary threshold, which since 2015/16 has been set at the same level as the NI upper earnings limit.

Since 6 April 2016 employers do not have to pay secondary NI contributions for apprentices aged under 25 on wages up to the upper earnings limit.