N I Contributions 2020-21

 
 
The main rates and thresholds for national insurance contributions (NICs) for 2020-21 are set out below.
 
 
 
 
 
Class 1 National Insurance Contributions
Employees
£183pw to £961pw                                                     12%
Over £962pw                                                               2%

Employers
Over £183pw                                                            13.8%


Class 2 National Insurance Contributions
Class 2 flat rate £3 a week
Small profits threshold £6,475 a year

Class 4 National Insurance Contributions
9% of annual profits between £9,500 and £50,000
2% of annual profits above £50,000
 

The Government introduced an allowance of £3,000 per year for all businesses and charities to be offset against their employer Class 1 NIC liability from April 2016. The allowance will be claimed as part of the normal payroll process through Real Time Information.
 
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.
 
Once the employee reaches the age of 21 (during the tax year) then the employer's NIC exemption no longer applies.