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Generic Tax Name Social security contribution (Employees)
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
 
Taxpayers
The base or rate of social security contributions paid by Employees 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. You may be liable to pay National Insurance contributions if you:

  • work for an employer (an employed earner), and pay Class 1 National Insurance Contributions
  • work for yourself (self employed), and pay Class 2 and Class 4 National Insurance contributions

 

Someone who is not liable to pay National Insurance contributions may be able to pay certain contributions on a voluntary basis (normally Class 3 National Insurance contributions). These contributions are payable to safeguard or improve benefit entitlement for Basic State Pension and Bereavement Benefits

 

 

If you continue working after your State Pension age you do not have to pay Class 1 or Class 2 National Insurance contributions, except on earnings that should have been paid before State Pension Age.

Show your employer proof of your age, eg a birth certificate or passport, to make sure you stop paying National Insurance.

You don’t need a certificate of age exception (CA4140).

If you don’t want your employer to see your birth certificate or passport, write to HM Revenue and Customs (HMRC) giving the reason. HMRC will then send you a letter confirming you have reached State Pension age and don’t need to pay National Insurance.

National Insurance contributions and Employers Office

HM Revenue and Customs

BX9 1AN 

 

 

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
Employees 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 Employees 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 Employees












Comments

Employer's social security contributions are due on some benefits in kind (Class 1A contributions).

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 whether you are an employed earner or self employed; and the amount you earn. There may be occasions when you may work for an employer and for yourself at the same time. In these instances you may have to pay more than one class of contribution.
 
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 Employees are tax deductible Yes No

Comments

See Rate Section.
 
Rate(s) Structure
The following rates apply to Social Security Contributions paid by Employees
Pensions

Health care

Unemployment

Child care

Work-related illnesses and/or accidents

Education leave

Maternity leave

Others

Comments

Employees are subject to Class 1 National Insurance Contributions (2014/2015):

-          0% employee contributions on the first annual salary of £7,956.00;

-          12% on annual salary £7,956.00 and £41,865.00;

-          2% (uncapped) as from annual salary £41,865.00

 

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

£5,725 per year

£5,885 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%
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

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 52,505.00 GBP 3.15
2011 49,757.00 GBP 3.07
2010 47,619.00 GBP 3.06
2009 47,003.00 GBP 3.16
2008 48,677.00 GBP 3.20
2007 46,952.00 GBP 3.16
2006 47,321.00 GBP 3.36
2005 45,010.00 GBP 3.38
2004 42,485.00 GBP 3.38
2003 38,754.00 GBP 3.26
2002 32,969.00 GBP 2.94
2001 32,118.00 GBP 3.01
2000 29,762.00 GBP 2.90

Comments

Includes compulsory and voluntary Employees Social Contributions and Social Contributions by self and non-employed persons (D61121, D61122 and D6113)