National insurance

Class 1

Employees start paying Class 1 NIC from age 16 (if sufficient earnings).

Employers pay Class 1 NIC in accordance with the table below.

Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate of 15.05% to 0% up to the Upper Secondary Threshold of £967 per week. Also applies to veterans in the first 12 months of employment.

Employees Class 1 NIC stop when they reach their 'State Pension age'. The employer's contribution continues.

Employees

2022/23:

Earnings per week %
Up to £190 1 Nil
£190.01 - £967 13.25
Over £967 3.25
  1. £242 from 6 July 2022

Entitlement to state pension and other 'contribution-based benefits' is retained for earnings between £123 and £190 per week.

2021/22:

Earnings per week %
Up to £184 Nil
£184.01 - £967 12
Over £967 2

Entitlement to state pension and other 'contribution-based benefits' is retained for earnings between £120 and £184 per week.

Employers

2022/23:

Earnings per week %
Up to £175 Nil
Over £175 15.05

2021/22:

Earnings per week %
Up to £170 Nil
Over £170 13.8

Other National Insurance payable by employers

Class 1A

15.05% on broadly all taxable benefits provided to employees and on certain taxable termination and sporting testimonial payments in excess of £30,000.

Class 1B

15.05% on taxable PAYE Settlement Agreements.

Class 2 and 4 (self-employed)

A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits).

Class 2 NIC stop when a person reaches State Pension age.

Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.

2022/23:

Class 2 (£)
Flat rate per week 3.15
Small Profits Threshold (per year) 6,725
Lower Profits Limit 11,908

2021/22:

Class 2 (£)
Flat rate per week 3.05
Small Profits Threshold (per year) 6,515

For 2022/23 the point at which the self-employed person starts to pay Class 2 NICs will increase to £11,908. This means those with profits between the Small Profits Threshold and the Lower Profits Limit will not pay Class 2 NICs, but will still be able to access entitlement to contributory benefits. A self-employed person with profits below the Small Profits Threshold might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and other benefits.

Class 4

2022/23:

Annual profits %
Up to £11,908 Nil
£11,908.01 - £50,270 10.25
Over £50,270 3.25

2021/22:

Annual profits %
Up to £9,568 Nil
£9,568.01 - £50,270 9
Over £50,270 2

Class 3

A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.

Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.

Flat rate per week: £15.85 (2021/22: £15.40)

About us

We at Bowen & Partners pride ourselves on our personal customer service and high client satisfaction levels.

Bowen & Partners is the trading name of Bowen Accountants Ltd. Registered in England & Wales No. 06895043

Contact details

01249 720341

Bowen Accountants Ltd, Unit 1, Gate Farm, Sutton Benger, Chippenham, Wiltshire SN15 4RE

© 2022 Bowen Accountants Ltd. All rights reserved. We use cookies on this website, you can find more information about cookies here. powered by totalSOLUTION

In accordance with the disclosure requirements of the Provision of Services Regulations 2009, our professional indemnity insurer is 100% Allied World Assurance Company (Europe) Limited, of Pinpoint Underwriting, Riverview Business Park, Friarton Road, Perth, PH2 8DY. The territorial coverage is worldwide excluding professional business carried out from an office in the United States of America or Canada and excludes any action for a claim brought in any court in the United States of America or Canada.