National Insurance Contributions (NICs)
| 2015/16 |
Employee (primary) |
Employer (secondary) |
|
|---|---|---|---|
| Class 1 (not contracted out) | |||
| Payable on weekly earnings of: | |||
| Below £112 (lower earnings limit) | Nil | - | |
| £112 - £155 (primary threshold) | *0% | - | |
| Up to £156 (secondary threshold) | - | Nil | |
| Above £156 | - | 13.8% | |
| £155.01 - £815 (upper earnings limit) | **12% | - | |
| £156.01 - £815 (upper secondary threshold - under 21s) | 12% | 0% | |
| Above £815 | **2% | - | |
|
*No NICs are actually payable but a notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement. **Over state pension age, the employee contribution is generally nil. |
|||
| Employment Allowance | Up to £2,000 (per year) | ||
| Class 1A | On relevant benefits | 13.8% | |
| Class 2 | Self employed | £2.80 per week | |
| Small profits threshold | £5,965 per annum | ||
| Class 3 | Voluntary | £14.10 per week | |
| Class 4 | Self employed on annual profits | ||
| £8,060 - £42,385 | *9% | ||
| Excess over £42,385 | *2% | ||
| *Exemption applies if state pension age was reached by 6 April 2015. | |||
Apprentices
Employer NICs up to the upper secondary threshold for apprentices aged under 25 will be abolished from April 2016.
Changes to the Employment Allowance
From April 2016 the Employment Allowance will increase to £3,000. However, companies where the director is the sole employee will no longer be able to claim this allowance.
Upper Earnings Limit
It was announced that the NICs Upper Earnings Limit will increase to remain in line with the income tax higher rate threshold, which will rise to £43,000 in 2016/17 and to £43,600 in 2017/18.
Class 2 and Class 4 NICs
The Government has previously announced its intention to abolish Class 2 NICs and reform Class 4 NICs to introduce a new benefit test. The Government will consult on the detail and timing of these reforms later in 2015.