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.
