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National insurance contributions

National insurance contributions and rates in 2019/20

 

Weekly earnings Employee Employer
Up to £166 nil* nil*
From £166.01 to £962 12% 13.8% 
 Over £962  2% 13.8% 
 Over state pension age 0% 13.8% 

*0% for employees under 21 and apprentices under 25 on earnings up to £892 aweek.*0% for employees under-21 and apprentices under-25 on earnings up to £962 a week.

Employment allowance

An employer can claim employment allowance of £3,000. Only one claim may be made by the employer and any connected employers. Not available if the only paid employee is a director.

*Entitlement to contribution-based benefits retained for earnings between £118 and £166 per week

**The rate is 0% in relation to employees under 21 and apprentices under 25 on earnings up to £962 per week

Class 1A (on relevant benefits) provided to employees and directors 13.8%
   
Class 1B (on PAYE settlement arrangement) 13.8%  
   
Class 2 (self-employed) £3 per week
Class 2 contributions - share fishermen £3.65 per week
Class 2 contributions - volunteer development workers £5.90 per week
Small profits threshold - no compulsory NICs if profits do not exceed £6,365 per annum
Contributions cease at state retirement age  
Class 3 (voluntary) £15 per week
   
Class 4* (self-employed on profits)  
£8,632 to £50,000 9%
Above £50,000 2%
*Exemption applies if state retirement age was reached by 6 April 2019.
 Reduced rate for certain married women
(on earnings between £166 and £962)
 5.85%
Maximum contributions  
Class 1 £4,967.04  + 2% of earnings over £50,000  pa.
Class 2 and Class 4 £3,879.12  + 2% of profits over £50,000  pa.
Apprenticeship levy allowance (employer*) £15,000
Apprenticeship levy rate 0.5%

Apprenticeship levy

Levy-paying employers can create an account on the apprenticeship service in order to spend levy funds on apprenticeships, manage their apprentices and manage payments to training providers.

Employers are entitled to an annual levy allowance of £15,000 to set against this levy.

They can sue one-twelfth of the levy per tax month on a cumulative basis, unused levy allowance can be carried forward and used in a later month within the same year.

*Shared between connected companies - allocated as the companies choose before the start of the tax year.

Notes

  1. For children under 16, and employees over state pension age there are no national insurance contributions payable, but employers' contributions remain payablein respect of employees over state pension age.
  2. No employers NIC are payable on earnings up to £892 per week for those under 21, or 25 for an apprentice.

Class 1A NICs are now due on termination payments over £30,000 and sporting testimonials over £100,000.

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