National Insurance Contributions
In addition to income tax, we also pay National Insurance Contributions out of the wages / salaries we earn. These contributions are paid by employees, employers and people who are self employed.
Who plays National Insurance?
The type of National Insurance Contribution you make depends on how you are employed and how much you earn. The different payment types are broken down into 'classes' - take a look at this table for more information.
| National Insurance | Who pays? |
|---|---|
| Class 1 | People in employment, earning more than £155 a week and under State Pension age. The contribution is automatically deducted from your wages by the employer. |
| Class 1A or 1B | Employers pay this contribution for any additional benefits they offer to their employees (such as expenses, healthcare, etc.). |
| Class 2 | Self-employed people, but only if you earn more than £5,965 a year. |
| Class 3 | This is a voluntary contribution - you can choose to pay voluntary contributions to fill or avoid gaps in your National Insurance record. For example, if you're self-employed but don't earn enough money to pay Class 2 contributions, you can make voluntary contributions to ensure you still qualify for the State Pension and other benefits. |
| Class 4 | Self-employed people, once they are earning profits of more than £8,060 a year. |