Question

How is the National Insurance Contribution calculated in the UK?


Answers (1)

by Qcrew 14 years ago

In the UK, if you're employed you need to pay Class 1 National Insurance contributions, which is normally deducted from your salary by your employer each month.

  • If your income is between £139 and £817 a week, you pay 12% of the amount you earn.
  • if your income is more than £817 a week, you need to pay further 2% of earnings over £817.
  • If you're a member of your employer's contracted-out pension scheme, you can pay a lower rate of National Insurance contributions.

If you are self-employed you need to pay Class 2 and Class 4 National Insurance contributions
You need to pay £2.50 a week for Class 2 National Insurance contributions, which is a flat rate. Normally you get an invoice from HM Revenue & Customs, which can be paid in a participated post office. Or, you can set up a direct debit.

The Class 4 National Insurance contributions is to be paid the time when you pay your income tax. If your annual taxable profits are between £7,225 and £42,475, you need to pay 9% of the amount, and a further 2% on profits over that amount.
You may not have to pay Class 2 National Insurance contributions if your profits are less than £5,315.

source: www.hmrc.gov.uk/ni/intro/basics.htm#4


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