National insurance contributions

Employment allowance

From April 2014, eligible businesses, charities and CASCs are entitled to an annual 'employment allowance' of £2,000 to reduce their liability for class 1 secondary national insurance contributions.

National insurance contributions and rates in 2014/15

Class 1 (not contracted out) Employer Employee
Lower earnings limit  n/a £111
Payable on weekly earnings    
£111.01-£153 n/a 0%
£153.01 - £805 13.8% 12%
Over £805 13.8% 2%
Payable on monthly earnings    
£481 - £663 n/a 0%
£663.01 - £3,489 13.8% 12%
Over £3,489 13.8% 2%
Over state retirement age 13.8% n/a
Class 1A (on relevant benefits) 13.8% n/a
   
Class 1B (on PAYE settlement arrangement) 13.8%  
   
Class 2 (self employed) £2.75 per week
Class 2 contributions - share fishermen £3.40 per week
Class 2 contributions - volunteer development workers £5.55 per week
Limit of net earnings for exception £5,885 per annum
Contributions cease at state retirement age  
Class 3 (voluntary) £13.90 per week
   
Class 4* (Self employed on profits)  
£7,956 to £41,865 9%
Above £41,865 2%
*Exemption applies if state retirement age was reached by 6 April 2014.
   
Maximum contributions  
Class 1 £4,146.71 + 2% of earnings over £41,865 pa.
Class 2 and Class 4 £3,197.56 + 2% of profits over £41,865 pa.

Notes

  1. For children under 16, and employees over state pension age there are no national insurance contributions payable, but employers' contributions remain payable

Forward to 2015

With effect for the tax year 2015/16 it will be possible to pay the self employed class 2 national insurance contribution via self assessment.