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NATIONAL INSURANCE RATES AND CATEGORIES

By October 12, 2019 No Comments

Contributions Rates:

Employees Class-1 Contributions deducted in the following ways;

  • Directly deducted from the employee’s salary
  • Paid by the employer

The Contributions Deducted or paid depends on the;

  • Employees National Insurance letter
  • On the Employees Earning

Employees National Insurance Rates:

Category letter £118-£166 per week or (£512-£719 per month) £166.01-£962 per week (£719.01-£4,167 per month) Over £962 per week (£4,167 per month)
A 0% 12% 2%
B 0% 5.85% 2%
C
H 0% 12% 2%
J 0% 2% 2%
M 0% 12% 2%
Z 0% 2% 2%

 

Employers National Insurance Rates:

Category letter £118-£166 per week (£512-£719 per month) £166.01-£962 per week (£719.01-£4,167 per month) Over £962 per week (£4,167 per month)
A 0% 13.8% 13.8%
B 0% 13.8% 13.8%
C 0% 13.8% 13.8%
H 0% 0% 13.8%
J 0% 13.8% 13.8%
M 0% 0% 13.8%
Z 0% 0% 13.8%

 

Class-1A and Class-1B rates:

Employer paid Class-1A and 1B National Insurance Contribution on the benefits and expenses gave to the employees in the relevant tax period, rate of contribution in the current period 2019-2020 is 13.8%.

National Insurance Category Letter:

Employers use an employee’s categories letter to work out how much they both needs to contribute;

Category letter Employees
A All employees except for those who are in groups B, C, J, H, M and Z in this table
B Married women and widows paid reduced National Insurance
C Employees over the State Pensions age
J Some employees who defer their National Insurance due to paid it in other jobs
H Apprentice under 25
M Employees under 21
Z Employees under age 16 defer their National Insurance due to paid it in other jobs

 

Letter X:

In this category of letter, employees do not pay National Insurance because they are under 16 years of age.

How to Pay:

Most of the peoples pay National Insurance of Class-2 and Class-2 through Self-Assessment.

Reduced Rates National Insurance:

Married woman and widowed paid National Insurance at the reduced rates, and the reduced rate is 5.85% if your employment earning is between £166.01-£962 per week (Instead of Standard rate which is 12%)

Stop Paying the Reduced rate:

Once you give-up your rights to pay National Insurance at reduced rates, you’ll not be able to claim it again.

Loose the rights to pay at reduced rates:

If;

  • You’ll get divorced
  • You have not earned over the lower limit of earning (which is £118 per week) or been self-employed for 2years in a row

Note: If your husband dies, you’ll be able to get reduced rates for a certain time.

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