National insurance contributions
National insurance contributions and rates in 2015/16
|Earnings per week||Earnings per week|
|Up to £155||Nil*||Up to £156||Nil|
|£155.01 - £815||12%||Over £156||13.8%**|
|Over state retirement age||0%||13.8%|
|Employment Allowance||£2,000 ***|
* Entitlement to contribution-based benefits retained for earnings between £112 and £155 per week
** The rate is 0% in relation to employees under 21 on earnings up to £815 per week
*** Per employer, per year. One claim only for companies in a group or under common control.
|Class 1A (on relevant benefits)||13.8%||n/a|
|Class 1B (on PAYE settlement arrangement)||13.8%|
|Class 2 (self employed)||£2.80 per week|
|Class 2 contributions - share fishermen||£3.45 per week|
|Class 2 contributions - volunteer development workers||£5.60 per week|
|Small profits threshold||£5,965 per annum|
|Contributions cease at state retirement age|
|Class 3 (voluntary)||£14.10 per week|
|Class 4* (Self employed on profits)|
|£8,060 to £42,385||9%|
|*Exemption applies if state retirement age was reached by 6 April 2015.|
|Class 1||£4,197.60 + 2% of earnings over £42,385 pa.|
|Class 2 and Class 4||£3,278.15 + 2% of profits over £42,385 pa.|
|Contracted out Class 1 relief between LEL and UAP (Upper Accrual Point)|
- For children under 16, and employees over state pension age there are no national insurance contributions payable, but employers' contributions remain payable.
- No employers national insurance contributions are payable for those under 21.
2016 and beyond
With effect from 6 April 2016 the employment allowance will increase to £3,000 from £2,000.
The government has announced that Class 2 national insurance contributions will be abolished from April 2016. At the same time the Class 4 will be reformed to introduce a new contributory benefit test.
Employers will no longer be liable for national insurance contributions in respect of apprentices under the age of 25. This will apply up to the Upper Earnings Limit. This change will come into effect on 6 April 2016.
Did you know?
The Treasury is expecting to raise £114.8 billion (2014/15 - £110.3 billion) from national insurance contributions.