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National Insurance rates

By Ian Robinson

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National Insurance rates

National Insurance rates differ depending on what type of work you do. Here, we calculate how much tax each type of worker has to pay. 

National Insurance has to be paid by both employed and self-employed workers. 

Your National Insurance contributions depend on your employment status and how much you earn. Not everybody has to pay National Insurance, but contributions count towards your state pension and other benefits. 

Find out if you're exempt from paying National Insurance.

If you don't have to pay National Insurance you might be eligible for National Insurance credits, or you can choose to make voluntary contributions.

National Insurance calculator 2017-18

Our National Insurance calculator shows how much you should pay for the 2017-18 tax year. 

National Insurance rates explained

If you have an employer, you'll pay Class 1 National Insurance contributions. This also includes if you're self-employed but work for an employer - it's your employer's job to pay your National Insurance through your payslips.

Your employer will deduct Class 1 National Insurance contributions from your:

  • salary
  • commission or bonuses
  • overtime
  • sick pay
  • maternity, paternity and adoption pay

National Insurance rates and earnings threshold

The amount of National Insurance you pay is worked out in a similar way to income tax. 

National Insurance is calculated on gross earnings (before tax or pension deductions) above an 'earnings threshold'. 

For 2017-18, the National Insurance threshold is £8,164 a year. If your earnings are below the earnings threshold, you pay no National Insurance contributions.

If you earn above the threshold, you pay 12% of your earnings between £8,164 and £45,000.

Anything you earn above £45,000 a year, you pay National Insurance at 2%. 

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Self-employed National Insurance rates

If you're self-employed, you could pay two types of National Insurance. 

You pay Class 2 contributions if you're self-employed, which are a flat rate of £2.85 a week for 2017-18. 

On profits (earnings minus allowable expenses) below a certain limit (£6,025 for 2017-18) you can elect not to pay Class 2 contributions, so you pay no National Insurance at all. 

If your profits are above £8,164 in 2017-18, you must pay Class 4 contributions as well as Class 2 contributions. 

In 2017-18, Class 4 contributions are 9% of taxable profits between £8,164 and £45,000. On profits over £45,000, Class 4 contributions are 2% of profits. 

Find out more: Tax for the self-employed – this comprehensive guide explains which taxes you are likely to have to pay

  • Get a head start on your 2016-17 tax return with the Which? Tax Calculator. Tot up your bill, get jargon-free, money-saving tips and submit your return direct to HMRC. 

Voluntary 'Class 3' National Insurance rates

If you're missing any National Insurance contributions, you can fill in gaps by paying Class 3 'voluntary' contributions. 

You can only pay voluntary contributions if:

  • you're not working
  • you're not liable for, or you're exempt from, Class 1 or Class 2 contributions
  • your contributions for a specific year aren't enough to count towards state pension entitlement (if you earn less than £157 a week), or
  • you live abroad

The 2017-18 Class 3 NI rate is £14.25 a week. This is the maximum you can pay each week. 

If you're self-employed and exempt from Class 2 contributions on account of low profits, it is cheaper to pay Class 2 NI contributions voluntarily, which are £2.85 a week, than make Class 3 NICs. You will, however, only be able to do this until April 2018. 

The same applies for years when you work overseas for a foreign employer but still want to get the benefits that paying NI entitles you to in  the UK. 

This only applies if you previously lived in the UK for three years or paid three years' worth of National Insurance before going abroad. 

Find out more about making voluntary National Insurance contributions

National Insurance rates 2017-18 compared

Employed
How much you earn Class 1 rate
Less than £8,164 0%
£8,164 - £45,000 12%
More than 45,000 2%
Self-employed
How much you earn Class 2 and 4 rates
Less than £6,025 0%
£6,025 to £8164 £2.85 per week
£8,164 - £45,000 9% + 2.85 per week
More than 45,000 2% + £2.85 per week
Unemployed or exempt from NI
Type of contributions  Class 3 voluntary contributions
Amount £14.25 per week

The 'married woman's stamp'

Until 1977, married women could opt to make National Insurance contributions at a reduced rate. They stopped building up entitlement to state pension in their own right and instead relied on their husband's National Insurance contributions record. 

This was known as the 'married woman's stamp'.

Women who took this option can continue to make reduced National Insurance contributions or pay at the full rate and build up individual pension entitlement. With reduced contributions, their maximum entitlement is currently 60% of basic state pension. 

Since 2016, any women in this position who have yet to reach state pension age will no longer be eligible. Their pension entitlement will depend instead on the number of qualifying years' National Insurance contributions they have made in their own right. The minimum required to get any state pension is 10 years.      

Find out more about the state pension in our expert guide

  • Last updated: June 2017
  • Updated by: Tom Wilson
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