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Rates and Categories

National Insurance Rates: NI Categories

What are the National Insurance Contribution Rates and Category Letters? Employee earnings and the National Insurance category letter determines the amounts deducted and the rates you must pay.

NI RATES AND CATEGORIES: Find out what National Insurance rates and category letters mean for your situation.

This guide explains how Class 1 National Insurance contribution rates work for the current tax year 2017 to 2018.

NI Contribution Rates

Class 1 National Insurance rates for employees are made up using two separate contributions;

1. An amount is deducted from employee pay (employee NI)

2. An amount is paid by their employer (employer NI)

Employee National Insurance Rates and Letters

The National Insurance table shows the rate that employers deduct from their employees' pay for the tax year 2017 to 2018.

Category Letter Earning £113 to £157 a week (£490 to £680 a month) Earning £157.01 to £866 a week (£680.01 to £3,750 a month) Earning over £866 a week (More than £3,750 a month)
A 0% 12% 2%
B 0% 5.85% 2%
C N/A N/A N/A
H 0% 12% 2%
J 0% 2% 2%
M 0% 12% 2%
Z 0% 2% 2%

Employer National Insurance Letters and Rates

The National Insurance table shows the rate that employers pay towards their employees' pay for the tax year 2017 to 2018.

Category Letter Earning £113 to £157 a week (£490 to £680 a month) Earning £157.01 to £866 a week (£680.01 to £3,750 a month) Earning over £866 a week (More than £3,750 a month)
A 0% 13.8% 13.8%
B 0% 13.8% 13.8%
C 0% 13.8% 13.8%
H 0% 0% 13.8%
J 0% 13.8% 13.8%
M 0% 0% 13.8%
Z 0% 0% 13.8%

If you want to check your employees' National Insurance you can use the government calculators and tables. These links are to HM Revenue and Customs employers' full rates and thresholds for several previous tax years:

Class 1A and Class 1B Rates

UK employers pay Class 1A and 1B National Insurance one time per year on expenses and benefits they provide for their employees. The expenses and benefits rate is 13.8% for the tax year 2017 to 2018.

NI Category Letters

The table shows the employee National Insurance category letter flowchart. This is useful for employers to use when they run off the payroll. It can also help employers and employees work out how much they both need to contribute.

Note: Even though most employees have 'National Insurance category A' you can find yours on your payslip.

NI Category Letter Employee Group
A All employees apart from those in groups B, C, J, H, M and Z in this table
B Married women and widows who are entitled to pay the reduced rate of National Insurance
C Employees who are over the State Pension age
J Employees who can defer National Insurance because they are already paying it in another job
H Apprentice under 25 years old
M Employees under 21 years old
Z Employees under 21 who can defer National Insurance because they are already paying it in another job

NI for Employees who are in a Contracted-out Money Purchase Scheme

In fact this kind of scheme completely ended in April 2012. But there may be some employees who are still part of one.

NI Category Letter Employee Group
F Tax years before 2012 to 2013 only: all employees apart from the ones in groups G, C and S in this table
G Tax years before 2012 to 2013 only: married women and widows entitled to pay reduced National Insurance
C Employees over the State Pension age
S Tax years before 2012 to 2013 only: employees who can defer National Insurance because they’re already paying it in another job

National Insurance Categories: NI Letter X

Employers should use category letter 'X' for employees who are not liable for National Insurance. The most likely reason to use 'NI letter X' is for those under 16.

National Insurance for Mariners and Deep Sea Fishermen

Contact HMRC for detailed information on National Insurance contributions for mariners and deep sea fishermen.

Self-employed National Insurance Rates and Exemption

As a rule, National Insurance contributions for those who are self-employed are:

Note: You can work out your annual profits by deducting your total expenditure from your self-employed income.

How Much is Class 2 National Insurance?

There are times when you do not need to pay NICs or cannot qualify for NI credits. But, you can choose to pay voluntary National Insurance contributions. You would be topping up any gaps that exist in your NI record.

Paying voluntary National Insurance counts towards many state benefits and towards the UK State Pension.

Employees usually pay Class 3 contributions whereas those who are self-employed or living abroad may choose to pay voluntary Class 2 contributions instead.

National Insurance Contribution Rates and NI Letter Categories in the United Kingdom