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National Insurance (NI)

National Insurance (NI) is a contribution paid to HMRC by employees, their employers, and self-employed people. The purpose of the National Insurance is to qualify people for certain benefits and the state pension.

Different taxpayers pay different kinds of National Insurance, called “classes”:

NI class Who pays How is it paid How much is it
Class 1 Employees earning more than £8,632 a year Your employer deducts it through PAYE 12% (or 2% if you earn over £50,000 a year)
Class 1A or 1B Employers for employees earning over £8,632 a year Your employer pays it on top of your Class 1 13.8%
Class 2 Self-employed people earning over £6,365 a year Through a Self Assessment tax return Flat £153.40 per year
Class 3 Voluntary contributions – you can pay them to fill gaps in your NI record Through a Direct Debit £15 per week
Class 4 Self-employed people earning over £8,632 a year Through a Self Assessment tax return 9% (or 2% if you earn over £50,000)

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