Class 1 National Insurance
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 >£183 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 >£6,475 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 >£9,501 per year||Paid via a tax return|
How does it work?
It’s 12% of your salary after you start earning £183 per year. This amount then drops to 2% once you earn over £50,000 a year.
Earning over £50,000 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
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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