N I Contributions 2016-17

 
 
The main rates and thresholds for national insurance contributions (NICs) for 2016-17 are set out below.
 
 
 
 
 
Class 1 National Insurance Contributions
Employees
£155.01pw to £827pw                                                12%
Over £827pw                                                               2%

Employers
Over £156pw                                                            13.8%


Class 2 National Insurance Contributions
Class 2 flat rate £2.80 a week
Small profits threshold £5,965 a year

Class 4 National Insurance Contributions
8% of annual profits between £8,060 and £43,000
2% of annual profits above £43,000
 
Class 2 national insurance contributions for the self-employed will be scrapped from April 2018.
 
The Government introduced an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 NIC liability from April 2014. The allowance will be claimed as part of the normal payroll process through Real Time Information.

The employment allowance of £2,000 increased to £3,000 from April 2016.
 
Abolition of employer's NIC for payments to employees under the age of 21
From 6/4/2015, every employer with employees under the age of 21 will no longer be required to pay Class 1 secondary NIC on the employee's earnings, up to the upper earnings limit of £42,285 for those employees.
 
Once the employee reaches the age of 21 (during the tax year) then the employer's NIC exemption no longer applies.
 
Employers NIC will be liable as normal on an under 21 employee's salary in excess of the upper earnings limit of £42,285.