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National Insurance contributions – how much you pay

2. National Insurance Contributions (NIC)

2.1 Class 1 NICs: Employee and employer rates and thresholds (£ per week)

Tax year 2016-17 Tax year 2017-18
Weekly Lower Earnings Limit (LEL) 13 112 113
Weekly Primary Threshold (PT) 13 155 157
Weekly Secondary Threshold (ST) 14 156 157
Upper Earnings Limit (UEL) 15 827 866
Upper Secondary Threshold for under 21s 15 827 866
Apprentice Upper Secondary Threshold (AUST) for under 25s 15 827 866
Employment Allowance (per employer) 3,000 per year 3,000 per year
Employee’s (primary) Class 1 contribution rates Tax year 2016-17 Tax year 2017-18
Earnings band 16 NIC rate (per cent) NIC rate (per cent)
Below LEL 0 0
LEL – PT 17 0 0
PT- UEL 12 12
Above UEL 2 2
Married woman’s reduced rate for (primary) Class 1 contribution rates Tax year 2016-17 Tax year 2017-18
Weekly earnings from between the PT and UEL 5.85 5.85
Weekly earnings from above UEL 2 2
Employer’s (secondary) Class 1 contribution rates Tax year 2016-17 Tax year 2017-18
Earnings band 18
Below ST 0 0
Above ST 13.8 13.8
Employer’s (secondary) Class 1 contribution rates for employees under 21 Tax year 2016-17 Tax year 2017-18
Earnings band 19
Below UST 0 0
Above UST 13.8 13.8
Employer’s (secondary) Class 1 contribution rates for Apprentices under 25 Tax year 2016-17 Tax year 2017-18
Earnings band 20
Below AUST 0 0
Above AUST 13.8 13.8

2.2 Class 2 NICs: Self-employed rates and thresholds (£ per week)

Tax year 2016-17 Tax year 2017-18
Small Profits Threshold (SPT) 13 5,965 per year 6,025 per year
Class 2 contribution rates 13 Tax year 2016-17 Tax year 2017-18
Annual Profits (£ a year) 21 £ per week £ per week
Below SPT 0 0
Above SPT 22 2.80 2.85
Special Class 2 rate for share fishermen 3.45 3.50
Special Class 2 rate for volunteer development workers 5.60 5.65

2.3 Class 3 NICs: Other rates and thresholds (£ per week)

Tax year 2016-17 Tax year 2017-18
Voluntary contributions 13 23 14.10 14.25

2.4 Class 4 NICs: Self-employed rates and thresholds (£ per year)

Tax year 2016-17 Tax year 2017-18
Lower Profits Limit (LPL) 13 8,060 8,164
Upper Profits Limit (UPL) 15 43,000 45,000
Class 4 contribution rates Tax year 2016-17 Tax year 2017-18
Annual profits band 24 NIC rate (per cent) NIC rate (per cent)
Below LPL 0 0
LPL to UPL 9 9
Above UPL 2 2
    1. 13. Uprated by CPI
    1. 14. Autumn Statement 2016 announced that the Secondary Threshold would be aligned with the Primary Threshold. From April 2018 onwards, it will be uprated in line with CPI
    1. 15. These thresholds are uprated in line with the Higher Rate Threshold to maintain alignment between the Upper Earnings Limit and Higher Rate Threshold
    1. 16. The limits are defined as LEL – Lower Earnings Limit; PT – Primary Threshold; and UEL – Upper Earnings Limit
    1. 17. No National Insurance contributions (NICs) are actually payable but a notional Class 1 NIC is deemed to have been paid in respect of earnings between the LEL and PT to protect contributory benefit entitlement.
    1. 18. The limit is defined as ST – Secondary Threshold
    1. 19. The limit is defined as UST – Upper Secondary Threshold
    1. 20. The limit is defined as AUST – Apprentice Upper Secondary Threshold
    1. 21. The Limit is defined as SPT – Small Profits Threshold
    1. 22. Class 2 NICs are liable to be paid by all self-employed persons with profits above the Small Profits Threshold (SPT). The self-employed may choose to pay Class 2 if their profits are below the SPT
    1. 23. Class 3 NICs can be paid by contributors to make the year a qualifying year for the basic State Pension (new State Pension from 6 April 2016) and Bereavement Benefit purposes
    1. 24. These limits are defined as LPL – Lower Profits Limit; and UPL – Upper Profits Limit