How Much National Insurance do I Pay as an Employee?

Many of people have this question in their mind that “How much national insurance do I pay as an employee?” In response to their query, we’ve written this blog post to answer all your doubts. Besides, we’ll also discuss the common issues that people face when it comes to NIC.

As an employee, you must pay Class 1 National Insurance Contributions on your earnings from the income received in the form of bonuses or salaries. The NICs you’re liable to pay depend on your earnings within a specific time.

How much National Insurance do I pay as an Employee?

There is a defined limit or threshold of NIC by the UK government that you need to pay as an employee. If your income falls below the NIC’s threshold, you might pay zero NIC. The minimum threshold to get an exemption from NIC is £242 a week or £1048 a month in 2024/25.

The amount of Class 1 NIC that you pay depends on the upper limit of your earnings, which is £967 per week or £4,189 per month in 2024/25.

The Class 1 NICs are calculated on a weekly or monthly basis depending on whether you receive your income weekly or monthly.

What if I Earn Less Than the Weekly/monthly Threshold?

If you’re earning below the primary threshold (£242 per week / £1048 per month) or the lower-earning limit (£120 per week / £520 per month), you sill need to pay Class 1 NIC. By paying NIC at zero rate, you may claim contributory benefits and the state pension. You can get details of state pensions on the government website.

What if I Have Two Jobs?

Like the first job, you would be paying NIC for the second job as well. As you are going to pay tax and NIC on the income that you will earn. However, income tax and NIC work differently. For tax, you get a single tax-free amount for the whole year. Whereas for NICs, there would be a separate limit for each job. Each job would have a different threshold of NIC.

What if I Am Both an Employee and Self-employed?

In such case, you must pay:

• Class 1 NIC on your normal income from your pay
• Class 2 and Class 4 NIC on the income earned as self-employed

You should remember that Class 1 NIC would be paid on the payday. While Class 2 NIC are not paid before 31 January. Class 4 NIC is collected along with income tax liabilities in your balancing payments and payments on accounts.

Quick Sum Up:

Hopefully, you have got the answer to ‘How much national insurance do I pay?‘ We have discussed some of the most common queries related to NICs.

Disclaimer: The information about How Much National Insurance do I Pay as an Employee? provided in this article including text and graphics. It does not intend to disregard any of the professional advice.