NATIONAL INSURANCE 2022/23: Find out how much you pay to the UK Government and HMRC in National Insurance Contributions. Perhaps more important, why do you need to pay NIC?
This section has the current National Insurance rates and classes. You may need this information to check your contributions record.
To qualify for the State Pension, and for certain other welfare benefits, you must pay National Insurance (NI) contributions.
If you are 16 or older and you earn above £190 a week, or self-employedand your profit is £6,725 a year (or higher), you will need to pay National Insurance.
To start paying National Insurance Contributions you will need your National Insurance number. To protect your National Insurance record, your NICs get considered as paid if you earn between £123 and £190 a week.
National Insurance Classes
NI ‘classes‘ are the different types of National Insurance (see information below). The class you pay depends on:
- Whether you are an employee or self-employed.
- The amount you earn.
- Whether you have gaps in your NI records.
When Do You Stop Paying National Insurance?
You stop paying Class 1 National Insurance when you reach the State Pension age if you are employed. Being self-employed means you stop paying:
- NI Class 2 contributions at State Pension age if you are up-to-date (you may pay up to 4 months later if you owe any contributions).
- NI Class 4 contributions from the start of the tax year (6th of April) after reaching the State Pension age.
Note: This NI overview section and guide is also available in Welsh language ‘Yswiriant Gwladol‘ (Cymraeg).
National Insurance Classes 1, 2, 3, and 4
Your employment status and earnings determine what National Insurance class you pay. Having any gaps in your National Insurance record may also affect NIC classes.
|National Insurance Class||Who Should Pay National Insurance Contributions|
|Class 1 National Insurance||Employees who earn over £190 a week and under State Pension age (NI is automatically deducted by your employer)|
|Class 1A or 1B National Insurance||Employers pay these contributions directly on the expenses or benefits of their employees|
|Class 2 National Insurance||Self-employed people (not compulsory if you earn less than £6,725 a year but you can make voluntary contributions)|
|Class 3 Voluntary Contributions||You can choose to pay them to fill, or to avoid, gaps in your National Insurance record)|
|Class 3A National Insurance||Voluntary contribution (used as a state pension top up class 3a with a single lump sum if you can retire before 6 April)|
|Class 4 National Insurance||Self-employed people who earn profits over £9,881 a year|
How Much National Insurance Do You Pay?
Your contributions of National Insurance vary by how much you earn and your employment status (e.g. employed, self-employed).
Class 1 NI for People who are Employed
Most employees pay Class 1 National Insurance contributions. These are the standard National Insurance rates for the tax year 6th April 2022 to April 5th 2023.
|The Amount Your Earn||National Insurance Rate Class 1|
|£190 to £967 a week (£823 to £4,189 a month)||13.25%|
|Over £967 a week (£4,189 a month)||3.25%|
Your payments are lower if you are a married woman or a widow with a CA4139 ‘Certificate of Election’. Apply for a CA4139 by filling in the CF9 form.
You also pay less if you have more than one job and want to defer NI contributions.
Note: Employers’ National Insurance Contributions vary depending on the NI category letters of their employees.
How to Pay Voluntary National Insurance
Your NI contributions are part of your tax payments. Your employer deducts these payments before you receive your wages. The amount you contribute shows on your payslip.
As a Director of a limited company you can also be your own employee. You would pay Class 1 NI contributions through your PAYE system.
Those who are Self-employed
The amount of NI you pay depends on your profits. You might pay Class 2 National insurance Contributions or Class 4 National Insurance Contributions. Payments are usually made through the Government Gateway Self Assessment account.
Special rules apply if you have a ‘specific job‘. These include:
- Invigilators and people who set exam questions.
- People who run businesses involving property or land.
- Non salaried ministers of religion.
- People who make investments for themselves but not as a business.
What if you are Employed and Self-employed?
It is possible that you are self-employed and an employee of another company. So being self-employed you will pay Class 2 and Class 4 National Insurance contributions. As an employee you pay Class 1 NI via your PAYE deducted by your employer.
The amount you pay, above your PAYE contributions, depends on your combined income from all your jobs. File your Self Assessment tax return with HM Revenue and Customs (HMRC). They will then determine the amount of National Insurance contributions you must pay.
NI Rules for Landlords, Directors, and Share Fishermen
National Insurance rules vary for the following occupations:
- Directors of a company.
- Those who are running a property rental business predominantly as landlords.
- Share fishermen such as a master or a crew-member of a British fishing boat manned by more than one person.
Why Do We Pay National Insurance?
|Benefits Entitlement||Class 1: Employees||Class 2: Self-employed||Class 3: Voluntary Contributions|
|Basic State Pension||Yes||Yes||Yes|
|Additional State Pension||Yes||No||No|
|New State Pension||Yes||Yes||Yes|
|Bereavement Support Payment||Yes||Yes||No|
|Contribution-based Jobseeker’s Allowance||Yes||No||No|
|Contribution-based Employment and Support Allowance||Yes||Yes||No|
Note: You can top up your pension using voluntary contributions. As a rule, if you are self-employed and your profits are over £9,881 your Class 4 contributions do not count towards your state benefits.
National Insurance Help for those Not Working
As a rule, gaps in your National Insurance record affect your benefits. You can use National Insurance credits to help fill any gaps and protect your benefits.
You may get National Insurance credits if you are ill and cannot work or caring for someone full time. You can make voluntary contributions, to top up your NI, if you unable to get credits or are out of work.
NI and Change of Circumstance
It is your responsibility to inform HM Revenue and Customs if:
- Your personal details change, such as your marital status, name, or your address.
- You decide to set up a business and become self-employed.
- You cease being self-employed.