Your National Insurance bill depends on how much you earn, and how you earn it – find out who pays what.
What are National Insurance classes?
Workers make contributions to National Insurance in different ways depending on how they are employed and what they earn. These categories are known as ‘classes.’
In the table below, we explain the different National Insurance classes, including who needs to pay what in 2022-23, and how payment is collected.
|Who pays these?||How are they collected?|
|Class 1||Employees (under state pension age) earning more than £190 per week between 6 April 2022 and 5 July and £242 per week between 6 July 2022 to 5 April 2023||PAYE|
|Class 1 A or B||Employers pay these on employee benefits or expenses||Paid to HMRC|
|Class 2||Self-employed people with profits of more than £11,908* a year||Paid through self-assessment|
|Class 3||Voluntary contributions made by those with gaps in their National Insurance contributions history||Paid to HMRC via form CF83|
|Class 4||Self-employed people with profits of more than £9,880 a year between 6 April 2022 and 5 July and £12,570 between 6 July 2022 and 5 April 2023||Paid through self-assessment|
*Annualised figure made up of 13 weeks of £9,880 and 39 weeks of £12,570 threshold.
Class 1 and class 4 contributions increased by 1.25 percentage points in April 2022 to help fund health and social care.
From 2023, the levy will also be paid by those workers who are above the state pension age; currently, they don’t pay National Insurance at all.
National Insurance contributions for employees
Employees and most agency workers make Class 1 contributions, collected via PAYE together with their income tax.
In 2022-23 you will pay 13.25% on earnings between £9,880 and £50,270 from 6 April to 5 July; from 6 July the lower threshold is rising to £12,570. You’ll also pay 3.25% on earnings above £50,270.
In 2021-22, the rate paid was 12% on earnings between £9,568 and £50,270, and 2% on anything more.
But because NI is calculated monthly (if you’re paid monthly), you could end up paying more on irregular income such as bonuses.
On top of this, employers also make contributions on their workers’ income, generally of 15.05% from April 2022 of earnings above £758 per month.
- Find out more: National Insurance rates – for a full breakdown of NI rates and thresholds
Self-employed National Insurance contributions
If you’re self-employed, you’ll often pay both Class 2 and Class 4 National Insurance contributions.
In 2022-23 you pay Class 2 contributions if you earn more than £11,908, charged at £3.15 a week. However, if you earn more than £6,725 you’ll still be able to build up National Insurance credits, even though you’re not paying Class 2 contributions.
Class 4 contributions will come in on profits above £9,880 at 10.25% between 6 April and 5 July; from 6 July onwards the threshold will rise to £12,570. You’ll pay 3.25% on earnings above £50,270.
In 2021-22 you owed Class 2 contributions if you earned more than £6,515, which cost £3.05 a week.
Class 4 contributions were payable at 9% on profits above £9,568, falling to 2% on earnings above £50,270.
- Find out more: Self-employed National Insurance
Voluntary Class 3 contributions
Class 3 National Insurance contributions are those that you can pay voluntarily. You may opt to do this if you have gaps in your record from previous years.
These cost you £15.85 per week in 2022-23, up from £15.40 per week in 2021-22.
Student National Insurance contributions
You don’t start paying National Insurance until you’re over 16-years-old. Students who are older than this are not exempt. If they earn enough, they pay like any other worker.
If students don’t do paid work, they are not credited with NICs for the years they are studying.
This creates a ‘gap’ in their contributions record, though most will still work for enough years after qualifying to merit a full state pension.
Low-earners and National Insurance
You don’t have to pay National Insurance if you earn below a certain amount. In 2022-23 this is £9,880 between 6 April and 5 July 2022 and rises to £12,570 between 6 July 2022 and 5 April 2023 for employed workers; in 2021-22 it was £9,568.
But you should consider making voluntary Class 3 contributions, as extensive gaps in your record may deprive you of some benefits.
- Find out more: National Insurance and benefits – which benefits are linked to each type of contributions?
National Insurance credits
There can be gaps in your contributions record if you don’t pay National Insurance but, in many circumstances, you’ll be ‘credited’ with contributions by HMRC.
National Insurance credits can help you qualify for certain contributory benefits, such as basic state pension, and payments if you’re unemployed or unable to work due to illness.
To find out more, read our guide to National Insurance credits for a detailed explanation of who is entitled to them
National Insurance in retirement
Currently, workers no longer have to pay National Insurance upon reaching the state pension age (currently 66), even if you carry on working.
This is set to change from April 2023, due to a new health and social care levy of 1.25 percentage points, which will begin to be rolled out to workers below state pension age from April 2022.
Once you reach this age, there may be steps you can take to top-up your state pension, if you haven’t reached the full 35 years’ contributions to earn the maximum.