What is National Insurance?
3 June 2023 (Updated 3 June 2023)
In a nutshell
National Insurance is a form of tax on earnings paid by employees and employers to fund the welfare system in the UK. Things like:
- State pension
- NHS
- Benefits – housing, jobseeker’s allowance, Universal Credit
- Disability benefits
- Maternity allowance
- And so on…
Who pays National Insurance?
- 16+ year-olds who are either
- 1. An employee earning £242+/week, or
- 2. Self-employed and making a profit of £12,570+/month
- Company directors
When do you stop paying?
When you reach the State Pension age (66 right now).
How much do you pay?
| Your pay | Class 1 National Insurance rate |
|---|---|
| £242 to £967 a week (£1,048 to £4,189 a month) | 12% |
| Over £967 a week (£4,189 a month) | 2% |
| You’re a company director | Different rules (🎵) |
Sources
Tagged:
UK