National Insurance Contributions (NICs) – United Kingdom

No NI below this. Aligned with personal allowance. Employees pay 8% on earnings £12,571-£50,270, then 2% above £50,270. Deducted automatically through payroll.

8% on earnings between £12,571-£50,270 (£1,048-£4,189 monthly). 2% on all earnings above £50,270 (£4,189+ monthly). Rates unchanged from 2024/25.

Company directors can choose annual calculation method or standard monthly. Annual method may reduce NI if income fluctuates. Must decide at start of tax year.

Increased from 13.8% in April 2025. Applies to all employee earnings above secondary threshold. Significant cost increase for businesses with multiple employees.

Reduced from £9,100 in 2024/25. Employers start paying NI at £5,000 per employee per year (£417 monthly). Major change increasing employer costs on lower salaries.

Increased from £5,000. Reduces employer NI bill. £100,000 eligibility cap removed - now available to all employers. Claimed via payroll software. Helps offset rate increase for smaller businesses.

Employer pays 15% on benefits in kind (company cars, health insurance, etc.). Reported and paid annually. Increases cost of providing employee benefits packages.

Payable if profits exceed Small Profits Threshold £12,570. Builds entitlement to state benefits. Voluntary contributions £3.50/week available if below threshold.

6% on profits £12,570-£50,270. 2% on profits above £50,270. Paid through Self Assessment. Combined with Income Tax can create high marginal rates.

Employers pay 0% secondary NI on qualifying veterans' earnings up to upper secondary threshold £50,270. Available for first year of civilian employment.

Employers in designated Freeports and Investment Zones pay 0% secondary NI up to £25,000 per employee per year for up to 3 years. Check HMRC guidance for eligibility.

Employers pay 0% secondary NI on employees under 21 and apprentices under 25 on earnings up to £50,270 annually. Significant saving to encourage youth employment.