Budget Summary 2015/16

National Insurance Contributions

National Insurance Contributions (Table D)

Class 1 (Employees) Employee Employer
Main NIC rate 12.0% 13.8%
No NIC on first £155pw £156pw
Main rate* charged up to £815pw no limit
2% rate on earnings above £815pw N/A
Contracted out rebate on £112.01–£770pw 1.4% 3.4%
Employment allowance per business N/A £2,000

*Nil rate of employer NIC for employees under the age of 21 up to £815pw.

Since 6.4.2012, only employment with a salary-related pension scheme can benefit from the lower contracted-out NIC rates.

Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).

Class 2 (Self-employed)

Flat rate per week £2.80
Small profits threshold £5,965

Class 3 (Voluntary)

Flat rate per week £14.40

Class 3A

Contributions vary with age

Class 4 (Self-employed)

On profits £8,061 – £42,385 9.0%
On profits over £42,385 2.0%