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Generic Tax Name Social security contribution (Employers)
Tax name in the national language National Insurance
Tax name in English National Insurance
Member State UK-United Kingdom
Tax in force since
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

Social Security Contributions and Benefits Act 1992, as amended by subsequent acts.

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments
 
Geographical Scope

UK

 
Taxpayers
The base or rate of social security contributions paid by Employers on the income of employees and of blue collar workers Rates are identical
Bases are identical

Comments

Domestic-source income of non-residents is Subject to SSCer
Not Subject to SSCer

Comments


Comments

Anyone aged between 16 and state pension age (61.5 for females and 65 for males in 2012-13) - may have a liability to pay National Insurance contributions.

Employers must also pay National Insurance contributions for each person they employ who is aged 16 or over and whose earnings are above the defined thresholds.  

Anyone who is over State Pension age does not have to pay Class 1 National Insurance contributions, except on earnings that should have been paid before State Pension Age. Unless your employee shows you evidence that they are above State Pension age (Birth Certificate, Passport or a letter from HMRC) employers should still deduct Class 1 National Insurance contributions from the employee.

Employer's secondary Class 1 National Insurance contributions are still due and are payable at the not contracted-out rate, even if the employer operates a contracted-out scheme.

Summary of the seven classes of National Insurance contributions

Class

Description

Class 1

Paid by people who work as employed earners, and their employers.

Class 1A

Paid only by employers who provide certain directors and employees with benefits in kind which are available for private use, for example, cars and fuel.

Class 1B

Paid only by employers who enter into a Pay As You Earn (PAYE) Settlement Agreement (PSA) with HM Revenue & Customs for tax purposes.

Class 2

Flat rate contributions paid by the self-employed whose earnings are above the small earnings exception, or who do not claim an exception.

Class 3

 

Flat rate voluntary contributions for those not required to pay Class 1 or Class 2 contributions, which can be paid by those whose contribution record would otherwise be deficient, including those living overseas.

 Class 3a

Flat rate voluntary contributions to pensioners and those reaching State Pension age before 6 April 2016 who have entitlement to a UK State Pension the opportunity to increase their State Pension. Those eligible will be able to pay Class 3A contributions from 12 October 2015 until 5 April 2017. 

 Class 4

Profit-related contributions paid by the self-employed in addition to Class 2 contributions.

 
Tax object and basis of assessment
Employers pay social security contributions for








Comments

Base for all contributions listed here above is the same Yes No

As general rule, the income subject to Social Security Contributions of Employers includes























Comments

Income considered Domestic income
Worldwide income
Comments

Benefits in kind

The following benefits in kind are usually (partially or fully) subject to social security contributions paid by Employers












Comments

Employer contributions are levied on annual salary (uncapped) and on some benefits in kind.



Comments

The purpose is to Fund contributory benefits and the National Health Service. It also alleviates poverty and encourages social cohesion.

 

The amount of contributions you have to pay will depend on the amount you earn

 
Deductions, Allowances, Credits, Exemptions
Capped contributions No cap
Cap in monetary units:
Cap in % of the tax base:

Reduction

The reduction is
No reduction
A lump-sum amount
In percentage of base:
     
Based on salary
Capped
Comments

Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents

Social Security Contributions paid by Employers are tax deductible Yes No


Comments

See Rate Section.

 
Rate(s) Structure
The following rates apply to Social Security Contributions paid by Employers
Pensions

Health care

Unemployment

Child care

Work-related illnesses and/or accidents

Education leave

Maternity leave

Others

Comments

Employer contributions are levied above the first £ 7,956 of annual salary at 13.8% (uncapped), and on some benefits in kind (2014/15 rates). Some reductions may apply.


Special surcharges

There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

 

National Insurance - Rates and Allowances

£ per week

2013-14

2014-15

Lower earnings limit, primary Class 1

£109

£111

Upper earnings limit, primary Class 1

£797

£805

Primary threshold

£149

£153

Secondary threshold

£148

£153

Employees' primary Class 1 rate between primary threshold and upper earnings limit

12%

12%

Employees' primary Class 1 rate above upper earnings limit

2%

2%

Employees' contracted-out rebate

1.4%

1.4%

Married women's reduced rate between primary threshold and upper earnings limit

5.85%

5.85%

Married women's rate above upper earnings limit

2%

2%

Employers' secondary Class 1 rate above secondary threshold

13.8%

13.8%

Employers' contracted-out rebate, salary-related schemes

3.4%

3.4%

Employers' contracted-out rebate, money-purchase schemes

N/A

N/A

Class 2 rate

£2.70

£2.75

Class 2 small earnings exception

£5,885 per year

£5,725 per year

Special Class 2 rate for share fishermen

£3.35

£3.40

Special Class 2 rate for volunteer development workers

£5.45

£5.55

Class 3 rate

£13.55

£13.90

Class 4 lower profits limit

£7,755 per year

£7,956 per year

Class 4 upper profits limit

£41,450 per year

£41,865 per year

Class 4 rate between lower profits limit and upper profits limit

9%

9%

Class 4 rate above upper profits limit

2%

2%

Class 1A NICs payable in 2014-15 for benefits provided in the 2014-15 tax year are due at 13.8%




Comments
 
Tax due date
 
Tax collector

National Insurance Contributions are collected by HM Revenue and Customs.

 
Special features
 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d611

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 69,425.00 GBP 4.17
2011 68,470.00 GBP 4.23
2010 65,905.00 GBP 4.24
2009 63,531.00 GBP 4.28
2008 64,924.00 GBP 4.27
2007 60,736.00 GBP 4.09
2006 56,040.00 GBP 3.98
2005 52,503.00 GBP 3.95
2004 48,856.00 GBP 3.89
2003 43,544.00 GBP 3.66
2002 38,103.00 GBP 3.40
2001 37,971.00 GBP 3.56
2000 36,397.00 GBP 3.54

Comments

Includes Employers Actual social contributions (D6111).