Quids and Quills

accountancy for authors

National Insurance – current rates and how to pay

NATIONAL INSURANCE PAYMENTS are part of all taxpayers’ lives. As they’re currently under governmental review in some areas, let’s look at some of the overall information from the HMRC website.

How much you pay

The amount of National Insurance you pay depends on your employment status and how much you earn.

If you’re employed

You pay Class 1 National Insurance contributions. The rates for most people for the 2017 to 2018 tax year are:

Your pay Class 1 National Insurance rate
£157 to £866 a week (£680 to £3,750 a month) 12%
Over £866 a week (£3,750 a month) 2%

You’ll pay less if:

  • you’re a married woman or widow with a valid ‘certificate of election’
  • you’re deferring National Insurance because you’ve got more than one job

Employers pay a different rate of National Insurance depending on their employees’ category letters.

How to pay

You pay National Insurance with your tax. Your employer will take it from your wages before you get paid. Your payslip will show your contributions.

If you’re a director of a limited company, you may also be your own employee and pay Class 1 National Insurance through your PAYE payroll.

If you’re self-employed

You pay Class 2 and Class 4 National Insurance, depending on your profits. Most people pay both through Self Assessment.

There are special rules for people with specific jobs (such as examiners or people who run businesses involving land or property) who don’t pay Class 2 National Insurance through Self Assessment.

If you’re employed and self-employed

You might be an employee but also do self-employed work. In this case your employer will deduct your Class 1 National Insurance from your wages, and you have to pay Class 2 and 4 payments for your self-employed work.

How much you pay depends on your combined income from all your jobs. HM Revenue and Customs (HMRC) will let you know how much National Insurance is due after you’ve filed your Self Assessment tax return.

Directors, landlords and share fishermen

There are different National Insurance rules for:

  • company directors
  • landlords running a property business
  • share fishermen for example you’re working on a British fishing boat but not under a contract of service

You can apply to HMRC to check your National Insurance record and claim a refund if you think you’ve overpaid.

 

From HMRC website: https://www.gov.uk/national-insurance/how-much-you-pay

 

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