- Employees start paying Class 1 NICs from age 16 (if sufficient earnings).
- Employers pay Class 1 NICs in accordance with the table below.
- Employer NICs for apprentices under the age of 25 and employees under the age of 21 are reduced from the normal rate of 13.8% to 0% on earnings up to the upper secondary threshold (UST) of £967 per week. This also applies to veterans in the first 12 months of civilian employment. Similar rules apply to eligible employees in Freeports up to a limit of £481.
- Employees’ Class 1 NICs stop when they reach their State Pension age. Employer contributions continue.
Entitlement to State Pension and other contribution-based benefits is retained for earnings between £123 and £190* per week. (*£242 from 6 July 2022.)
**Reduced to 12%/2% for payments of earnings on or after 6 November 2022.
*Reduced to 13.8% for payments of earnings on or after 6 November 2022.
Other NICs payable by employers
Class 1A – 14.53% for 2022/23 and 13.8% for 2023/24 on broadly all taxable benefits provided to employees and on certain taxable termination and sporting testimonial payments in excess of £30,000.
Class 1B – 14.53% for 2022/23 and 13.8% for 2023/24 on PAYE Settlement Agreements.
Self-employed – Class 2 and 4
- A self-employed person starts paying Class 2 and Class 4 NICs from age 16 (if sufficient profits).
- Class 2 NICs stop when a person reaches State Pension age.
- Class 4 NICs stop from the start of the tax year after the one in which the person reaches State Pension age.
Class 3
Generally a person needs 35 years (30 years if State Pension age is before 6 April 2016) of NICs to get a full State Pension.
Class 3 voluntary contributions can be paid to fill or avoid gaps in an individual’s NICs record.
