National Insurance Contributions in the UK - dummies

National Insurance Contributions in the UK

Part of Tax 2010/2011 For Dummies Cheat Sheet (UK Edition)

In the UK, most working people between the ages of 16 and 65 are eligible to pay national insurance contributions, or NICs. Paying NICs helps you build up entitlement to certain social security benefits, including the state retirement pension. The amount of NICs you pay depends on how much you earn and whether you’re employed or self-employed.

Employees 2010-11
Weekly Earnings Rate
Up to £110 0%
£110.01–£844 11%, or 9.4% if contracted out of the state second pension
Over £844 1% on earnings above this level
Self-employed 2010–11
Limit below which Class 2 not payable: £5,075
Class 2 rate: £2.40 per week
Class 4 rate: 8% on profits between £5,715 and £43,875 and 1% on
sums above the upper limit