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National Insurance Contributions for 2018/19

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 (%)
Below LEL 0 0
LEL - PT15 0 0
PT- UEL 12 12
Above UEL 2 2

Employers NI Rate

Employers are liable to Class 1 and Class 1A (benefits-in-kind) NICs at 13.8%.

Self-employed National Insurance contributions

2018/19 2017/18
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%

Apprenticeship Levy

Employers of companies with a turnover in excess of £3 million per year,are also required to pay Apprenticeship Levy at 0.5%.

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