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


£183pw to £961pw 12%

Over £962pw 2%


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.