How Much National Insurance Should I Pay Each Year?


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National Insurance Contributions (NICs) are made in order to ensure your eligibility for certain state benefits, such as a pension. How much you pay in NICs is dependent on several factors, most notably your income and whether you are employed or self-employed.

You will need to pay NICs if you are aged between 16 and 65, and you will be required to pay regardless of whether you are self-employed or employed. If you are employed and earning between �67 and �645 per week you will pay 11% of this sum. This is known as 'Class 1 NICs'. If you are earning above �645 per week, you will pay a further 1%. If, however, you are a member of your employer's own pension scheme you will pay a lower rate.

If you are self-employed you will pay Class 2 NICs of �2.10 per week. On top of this you will pay a percentage of your taxable profits above �5,035. This will generally be 8%, unless you are earning over �33,540 PA, in which case you will pay a further 1%. If your earnings are expected to be under �4,465 you may be entitled to the Small Earnings Exception. This means that you will not have to pay Class 2 NICs. You can find out if you are eligible for this on the Inland Revenue website.

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