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Class 1 National Insurance

  • 2 min read

Class 1 National Insurance (NI) is a tax that you pay when you’re employed. There are multiple types of National Insurance that we’re liable to pay in the UK, depending on our employment status. 

Take a look at the different types below:

Class of National Insurance Who pays? How do you pay?
Class 1 Employees who are under state pension age and earning >£190 per week Automatically deducted by your employer from your salary – entitles you to claim JSA
Class 1A/1B Employers Deducted from employees’ benefits and expenses
Class 2 Self-employed earning >£6,725 per year Paid via a tax return
Class 3 Anyone Paid in voluntary contributions to clear any gaps in your NI
Class 4 Self-employed earning >£9,880 per year Paid via a tax return

How does it work?

It’s 13.25% of your salary after you start earning £190 per year. This amount then drops to 3.25% once you earn over £50,270 a year. 

Earning over £50,270 makes you a Higher Rate earner. 

What you need to remember about Class 1 National Insurance

  • You don’t need to pay this yourself – your employer will automatically take it out of your salary every month via PAYE
  • On top of Class 1 NI, there is a separate contribution that employers pay: Class 1A or Class 1B 
  • Class 1A/1B don’t come out of your salary, they are your employer’s responsibility
  • Your employer will deduct Class 1 NI even if you earn under the Personal Allowance
  • If you’re both employed and self-employed (e.g. you have a side gig), you’ll pay both Class 1 NI and Class 2 (and maybe even Class 4) NI 

It’s worth noting that following the 2022 Spring Statement, the NI thresholds for Class 1 and Class 4 contributions are increasing to match the Personal Allowance at £12,570. This change will take place in July 2022, which means that you won’t need to pay any NI for Class 1 and 4 for earnings less than £12,570.

To calculate the National Insurance that you’re liable to pay, take a look at our employed and self-employed calculator.

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