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National Insurance Contributions — Rates
Class 1 — Employee and employer
| Earnings | 2024/25 | 2023/24 | ||
|---|---|---|---|---|
| Employee | Employer | Employee | Employer | |
| Below Lower Earnings Limit (LEL) | Nil | Nil | Nil | Nil |
| Above LEL to Earnings Threshold (ET) 1 | 0% | 0% | 0% | 0% |
| Above ET to Upper Earnings Limit (UEL) 2, 3a, 4, 5, 6, 7 | 8% | 13.8% | 10% | 13.8% |
| Above UEL 3b | 2% | 13.8% | 2% | 13.8% |
- Although no NICs are payable, to protect an employee's entitlement to contributory benefits notional Class 1 NIC are deemed to have been paid on earnings between the LEL and the ET.
- The rate quoted above for 2023/24 applied from 6 January 2024; the rate applicable until 5 January 2024 was 12%.
- Employers are not required to pay Class 1 NIC on earnings up to the Upper Secondary Threshold (UST) for any employee aged under 21. Employers are not required to pay Class 1 NIC on earnings paid up to the Apprentice Upper Secondary Threshold (AUST) to apprentices under the age of 25. As shown in the ‘National Insurance Contributions Thresholds’ tables, the UST and AUST will be the same as the UEL in 2024/25.
- Employer Class 1 NIC relief is available up to the Veteran’s Upper Secondary Threshold (VUST) to those who employ armed forces veterans. Employers are therefore not required to pay Class 1 NIC on earnings for 12 months from the veteran’s first day of civilian employment after leaving the armed services. As shown in the ‘National Insurance Contributions Thresholds’ tables, the VUST will be the same as the UEL in 2024/25.
- Employer Class 1 NIC relief is available for eligible employees working in all Freeports from April 2022 or when a tax site is designated as a Freeport after this date if later. Employers are therefore not required to pay Class 1 NIC on earnings up to the Freeport Upper Secondary Threshold (FUST) until at least April 2026 with the intention to extend for up to a further five years to April 2031, subject to a review of the relief. Relief will also be given up to the IZUST for employers operating in investment zones. As shown in the ‘National Insurance Contributions Thresholds’ tables, the FUST and IZUST are set at £481 per week, and its monthly and annual equivalents.
- Employees over the State Pension Age do not pay Class 1 NIC, but employers are still required to pay Class 1 NIC on their earnings.
Class 1A and Class 1B — Employer
| Earnings or benefits | 2024/25 | 2023/24 |
|---|---|---|
| Class 1A 1 | ||
| - Most taxable benefits, including car and fuel benefit charges | 13.8% | 13.8% |
| Class 1B | ||
| - Earnings in a PAYE Settlement Agreement and income tax thereon | 13.8% | 13.8% |
Class 2 and Class 4 — Self employed
| Income or profits | 2024/25 | 2023/24 |
|---|---|---|
| Class 2 1 | ||
| - Below Small Profits Threshold (SPT) 1 | £3.45 | £3.45 |
| - Between SPT and Lower Profits Threshold | 0% | 0% |
| - Weekly flat rate above LPT | £0.00 | £3.45 |
| Class 4 | ||
| - Below Small Profits Threshold (SPT) | 0% | 0% |
| - Between SPT and Lower Profits Limit (LPL) | 0% | 0% |
| - Between LPL and Upper Profits Limit (UPL) | 6% | 9% |
| - Above UPL | 2% | 2% |
- Payment of Class 2 NICs has traditionally been voluntary for those earning less than the Small Profits Threshold. From 6 April 2024, those earning above the Lower Profits Limit will not be required to pay Class 2 NICs but will continue to get access to contributory benefits including the State pension via a NIC credit. Those with annual profits below £6,725 and others who pay Class 2 NIC voluntarily will continue to be able to do so.
Class 3 — Voluntary
| Contributions | 2024/25 | 2023/24 |
|---|---|---|
| Class 3 | ||
| - Weekly flat rate voluntary payment | £17.45 | £17.45 |