Do I pay National Insurance?
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.
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, as well as their own employer contributions of 13.8%.
It's worth finding 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 rates 2018-19
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'.
Your employer will deduct Class 1 National Insurance contributions from your:
- commission or bonuses
- sick pay
- maternity, paternity and adoption pay.
For 2018-19, the National Insurance threshold is £8,424 a year (up from £8,164 in 2017-18). 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 £8,424 and £46,350 (increased from £45,000 in 2017-18).
On anything you earn above £46,350 a year, you pay National Insurance at 2%.
|How much you earn||Class 1 rate|
|Less than £8,424||0%|
|£8,424 - £46,350||12%|
|More than £46,350||2%|
|How much you earn||Class 2 and 4 rates|
|Less than £6,205||0%|
|£6,205 to £8,424||£2.95 per week|
|£8,424 - £46,350||9% + £2.95 per week|
|More than £46,350||2% + £2.95 per week|
|Unemployed or exempt from NI|
|Type of contributions||Class 3 voluntary contributions|
|Amount||£14.65 per week|
National Insurance calculator 2018-19
Use our National Insurance calculator for 2018-19 to discover how much you'll pay next tax year.
We've assumed that self-employed people have elected to pay Class 2 National Insurance contributions.
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 £2.95 a week for 2018-19 (and £2.85 per week for the previous year).
On profits (earnings minus allowable expenses) below a certain limit you can elect not to pay Class 2 contributions, so you pay no National Insurance at all - that threshold is £6,205 for 2018-19 and £6,025 for 2018-19.
If your profits are above £8,424 in 2018-19, you must pay Class 4 contributions as well as Class 2 contributions.
In 2018-19, Class 4 contributions are 9% of taxable profits between £8,424 and £46,350. On profits over £46,350, 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 2017-18 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 2018-19 Class 3 NI rate is £14.65 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 £2.95 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: making voluntary National Insurance contributions.
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.