National Insurance

Employees and NICs

From 6 April 2024 the main rate of Class 1 employee NICs is 8% and the employer rate is 13.8%.

From 6 April 2025 the employer rate increases to 15%.

The Secondary Threshold, currently £9,100, is the point at which employers become liable to pay NICs on an individual employee’s earnings. The Secondary Threshold will reduce to £5,000 from 6 April 2025 until 6 April 2028, and then it increase by the Consumer Price Index (CPI) annually thereafter.

The Employment Allowance allows businesses with employer NICs costs of £100,000 or less in the previous tax year to deduct £5,000 from their employer NICs bill. From 6 April 2025 the Employment Allowance will increase to £10,500, and the £100,000 threshold will be removed.

The self-employed and NICs

From 6 April 2024 the rates of Class 4 self-employed NICs are 6% and 2%. These rates remain the same from 6 April 2025.

Class 2 NIC

Self-employed people with profits of £6,725 and above get contributory benefits, including the State Pension, through a National Insurance credit, without paying Class 2 NICs.

Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get contributory benefits including the State Pension will continue to be able to do so.

Changes from 6 April 2025

The Lower Earnings Limit (LEL) and the Small Profits Threshold (SPT) will increase by the September 2024 CPI rate of 1.7%. For those paying voluntarily, Class 2 and Class 3 NICs will also increase by 1.7%.

The LEL will be £6,500 per annum (£125 per week) and the SPT will be £6,845 per annum. The main Class 2 rate will be £3.50 per week and the Class 3 rate will be £17.75 per week.