Resource 3

National Insurance Contribution Rates and Allowances

Basic Tax

Class 1 National Insurance Thresholds

You can only make National Insurance deductions on earnings above the Lower Earnings Limit (LEL).

Class 1 National Insurance thresholds2018 to 2019

LEL

£116 per week

£503 per month

£6,032 per year

Primary Threshold (PT)

£162 per week

£702 per month

£8,424 per year

Secondary Threshold (ST)

£162 per week

£702 per month

£8,424 per year

Upper Secondary Threshold (under 21) (UST)

£892 per week

£3,863 per month

£46,350 per year

Apprentice Upper Secondary Threshold (apprentice under 25) (AUST)

£892 per week

£3,863 per month

£46,350 per year

Upper Earnings Limit (UEL)

£892 per week

£3,863 per month

£46,350 per year

Class 1 National Insurance Rates

Employee (primary) Contribution Rates

Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.

National Insurance category letterEarnings at or above LEL up to and including PTEarnings above the PT up to and including UELBalance of earnings above UEL

A

0%

12%

2%

B

0%

5.85%

2%

C

nil

nil

nil

H (Apprentice under 25)

0%

12%

2%

J

0%

2%

2%

M (under 21)

0%

12%

2%

Z (under 21 - deferment)

0%

2%

2%

Employer (secondary) Contribution Rates

You pay secondary contributions (Employer’s National Insurance) to HMRC as part of your PAYE bill.

National Insurance category letterEarnings at or above LELup to and including STEarnings above ST up to and including UEL/UST/AUSTBalance of earnings above UEL/UST/AUST

A

0%

13.80%

13.80%

B

0%

13.80%

13.80%

C

0%

13.80%

13.80%

H (Apprentice under 25)

0%

0%

13.80%

J

0%

13.80%

13.80%

M (under 21)

0%

0%

13.80%

Z (under 21 - deferment)

0%

0%

13.80%

Class 1A National Insurance: Expenses And Benefits

You must pay Class 1A National Insurance on work benefits you give to your employees, example a company mobile phone. You report and pay Class 1A at the end of each tax year.

National Insurance class2018 to 2019 rate

Class 1A

13.8%

Class 1B National Insurance: Paye Settlement Agreements (PSAS)

You pay Class 1B National Insurance if you have a PSA. This allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

National Insurance class2018 to 2019 rate

Class 1B

13.8%