National Insurance Contributions for 2018/19
From 2018/19, an employee will pay National Insurance Contributions (NIC’s) if the employee earns more than £162 a week (or £8424 annually). In the year 2017/18 this amount was £157. Similarly, the Weekly Lower Earnings Limit (LEL) has also been increased to £116 from £113 in 2018/19.
National Insurance is paid by either employees or self-employed who are over 16 and have a certain weekly income. There are different classes of National Insurance, which depends on the earning and status of employment.
|Weekly Thresholds||Tax year 2017 to 2018||Tax year 2018 to 2019|
|Lower Earnings Limit (LEL) (Employees don’t pay NI but get the benefits of paying)||113||116|
|Weekly Primary Threshold (PT) (Employees start paying NI)||157||162|
|Weekly Secondary Threshold (ST) (Employers start paying NI)||157||162|
|Upper Earnings Limit (UEL) (All employees pay a lower rate of NI above this point)||866||892|
|Upper Secondary Threshold for under 21s||866||892|
|Apprentice Upper Secondary Threshold (AUST) for under 25s (Employers of certain apprentices who are under 25 pay zero rate up to this point)||866||892|
|Employment Allowance (per employer)||3,000 per year||3,000 per year|
The National Insurance Contributions rate however remains the same for the year 2018/19.
|Employee’s (primary) Class 1 contribution rates||Tax year 2018 to 2019||Tax year 2017 to 2018|
|Earnings band||NIC rate (%)||NIC rate (%)|
|LEL - PT15||0||0|
Employers NI Rate
Employers are liable to Class 1 and Class 1A (benefits-in-kind) NICs at 13.8%.
Self-employed National Insurance contributions
|Small profits threshold – Earnings below this threshold incur no NICs||£6,025||£6,205|
|Lower Profits Limit – Earnings up to this limit incur Class 2 NICs||£8,424||£8,164|
|Upper Profits Limit||£46,350||£46,350|
Class 2 NICs
The weekly rate is flat £2.95 (The government has announced to abolish this from April 2019).
Class 4 (self employed)
|Rate on profits between lower and upper limits||9%|
|Rate on profits above upper limit||2%|
Employers of companies with a turnover in excess of £3 million per year,are also required to pay Apprenticeship Levy at 0.5%.