How much National Insurance must I pay on my earnings

National Insurance Contributions are calculated as a percentage of your gross pay. The exact amount payable depends on whether or not you are contracted-out of the State Second Pension. There are also fixed earnings thresholds and limits which are used to calculate liability.

When do I start paying National Insurance Contributions?

You must pay Class 1 National Insurance Contributions if:

you work as an employed earner (employee) in the UK,

you are 16 or over and under State Pension age (currently 60 for women, 65 for men), and
your earnings exceed a prescribed minimum level, known as the Earnings Threshold (ET).

There is no payment of Class 1 National Insurance Contributions on earnings up to the ET. However, once earnings reach the Lower Earnings Limit (LEL), National Insurance Contributions will be treated as having been paid on earnings from the LEL up to and including the ET. This protects the benefit entitlement position of lower earners.

If I become sick – does my employer continue to deduct National Insurance Contributions?

Yes. If your gross pay, including any statutory or other sick pay is above the ET, National Insurance Contributions are due.

What happens if I have more than one job – do both employers have to deduct National Insurance Contributions?

Yes. If you have more than one job with different employers, each employer has to deduct National Insurance Contributions if your gross pay with both or either of them is above the ET.

If you have more than one job with the same employer, your earnings from them may be added together for National Insurance Contributions purposes. If your total gross pay is above the ET, then your employer has to deduct National Insurance Contributions.

You may be able to defer some of your contribution liability if your earnings from separate employment’s exceed the Upper Earnings Limit. This may avoid you paying too much National Insurance and will remove the need for a refund.

If I have paid too much National Insurance Contributions, how do I claim a refund?

Contact Plummer Parsons, give us any evidence to support your claim, e.g. pay slips and P60s. and we will get on the case for you.

What is the difference between Primary and Secondary Class 1 contributions?

The employee pays primary contributions.

The employer pays secondary contributions.

Both are collected by the employer and paid to HM Revenue & Customs via the PAYE system.

What are reduced rate contributions?

Married women were permitted to pay reduced rate contributions on their earnings. They could continue to pay reduced rate contributions if they were widowed.

These contributions do not count towards benefits and do not qualify for a retirement pension.

This option was withdrawn in 1977, however, women who were already paying reduced rate contributions could opt to continue paying them, unless they got divorced..

How do I change personal details?

Please write to:

HM Revenue & Customs
National Insurance Contributions Office
Contributor Caseworker
Longbenton
Newcastle upon Tyne
NE98 1ZZ

Please ensure you give your name, address, contact number and your National Insurance number. You should also include birth, marriage, divorce and death certificates that are appropriate to your situation.

I want to request an Age Exemption Certificate

  If you phone the helpline please make sure you have details to hand of  your name, address, contact number and your National Insurance number.

For further help and advice please contact: 

Mrs Philippa Walker, our payroll manager, on 01323 431200 

or email her at p.walker@plummer-parsons.co.uk.

Plummer Parsons