National Insurance rates and categories

Our experts look at the different rates and categories of National Insurance that may apply to you

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s National Insurance rules and regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

What are the different National Insurance contribution rates?

An employee’s Class 1 contributions are made up of two parts – those paid by the employee themselves (deducted from their wages and known as Employee’s National Insurance) and those paid by their employer (known as Employer’s National Insurance). How much is deducted depends on the category letter applied to the employee and how much of their earnings fall into each category.

What are the Employee National Insurance rates?

The National Insurance rates for employees in tax year 2017/18 are currently set as:

Category Letter

£113 to £157 a week (or £490 to £680 a month)

£157.01 to £866 a week (or £680.01 to £3,750 a month)

Over £866 a week (or £3750 a month)

A

0%

12%

2%

B

0%

5.85%

2%

C

N/A

N/A

N/A

H

0%

12%

2%

J

0%

2%

2%

M

0%

12%

2%

Z

0%

2%

2%

So, to illustrate this, if you earn £1,200 a week and you are classed as Category H, you will pay the following:

  • No National Insurance on the first £157 you earn

  • 12% (which is £85.08) on your earnings between £157.01 and £866

  • 2% (which is £6.68) on your earnings above £866

  • This means your total National Insurance will be £91.76 for that week.

What are the Employer National Insurance rates?

The National Insurance rates for employers in tax year 2017/18 are currently set as:

Category Letter

£113 to £157 a week (or £490 to £680 a month)

£157.01 to £866 a week (or £680.01 to £3,750 a month)

Over £866 a week (or £3750 a month)

A

0%

13.8%

13.8%

B

0%

13.8%

13.8%

C

0%

13.8%

13.8%

H

0%

0%

13.8%

J

0%

13.8%

13.8%

M

0%

0%

13.8%

Z

0%

0%

13.8%

Once a year, employers have to pay Class 1A and Class 1B National Insurance on any expenses or benefits that they give to their employees. The current rate for this (for tax year 2017/18) is 13.8%.

What are the different category letters and what do they mean?

Every employee is issued with a National Insurance category letter which tells their employer’s payroll how much National Insurance to deduct from their wages. You can find out your category letter by checking your payslip – it will be shown on there. Most employees have the category letter A.

Category Letter

Employee Group

A

All employees, apart from those in groups B, C, J, H, M, X and Z

B

Married women and widows who are entitled to pay reduced National Insurance contributions

C

Employees over the State Pension age

J

Employees who can defer National Insurance because they are already paying it in another job

H

Apprentices under 25

M

Employees under 21

X

Employees under 16 or other employees who do not have to pay National Insurance

Z

Employees under 21 who can defer National Insurance because they are already paying it in another job

How can DSR Tax Claims help?

We know that National Insurance can be a complicated affair, even with our helpful guide to tell you everything you might need to know. It’s all very well reading about it and knowing what HMRC’s stand on it is – but how do you apply that to your own circumstances? It can seem like an absolute minefield but help is always available and you don’t need to battle through this alone. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

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