National Insurance (NI) in the United Kingdom is a system of contributions paid by workers and employers to qualify for certain benefits. The national insurance scheme is administered by HM Revenue and Customs (HMRC).
National insurance numbers
A national insurance number (NINO) is a number unique to you which is used to keep track of your national insurance contributions and the benefits which you are paid. The number is made up of two letters, six numbers and one letter, for example, AB 123456 C. You must not let anyone else use your number.
National Insurance Contributions classes and rates
NI Class Who pays How to pay NI rate 2017-2018
Class 1 Employee Throught payroll 12 % (pays than earning £680 to £3,750 a month)
Class 1 Employer Throught payroll 13.8 % (pays than employees earning £680 to £3,750 a month)
Class 2 Self-employed Throught Self Assessment £2.85 a week (pays than earning more than ££6,025 a year
Class 3 Voluntary contributions Write HMRC £14.25 a week
Class 4 Self-employed Throught Self Assessment 9 % (than earning profit £8,164 to £45,000)
What National Insurance is for
|Benefits||Class 1: employees||Class 2: self-employed||Class 3: voluntary contribution|
|Basic State Pension||Yes||Yes||Yes|
|Additional State Pension||Yes||No||No|
|New State Pension||Yes||Yes||Yes|
|Contribution-based Jobseeker's Allowance||Yes||No||No|
|Contribution-based Employment and Support Allowance||Yes||No||No|
Class 4 contributions paid by self-employed people don’t usually count towards state benefits.
You can find more information about Nationa Insurance on the GOV.UK
Follow us on Facebook to find more tips in business, accounting, tax and legal. Also you can get our articles for free directly to your email inbox. Please sign up form below.