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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)
A0%12%2%
B0%5.85%2%
C
H0%12%2%
J0%2%2%
M0%12%2%
Z0%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)
A0%13.8%13.8%
B0%13.8%13.8%
C0%13.8%13.8%
H0%0%13.8%
J0%13.8%13.8%
M0%0%13.8%
Z0%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 letterEmployees
AAll employees except for those who are in groups B, C, J, H, M and Z in this table
BMarried women and widows paid reduced National Insurance
CEmployees over the State Pensions age
JSome employees who defer their National Insurance due to paid it in other jobs
HApprentice under 25
MEmployees under 21
ZEmployees 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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