National Insurance contributions for your employees
1. Overview
For all employees earning more than £153 a week you have to deduct Class 1 National Insurance contributions from their pay. You also pay a direct contribution on an employee’s earnings above £153 a week. The exact amounts depend on:
- how much an employee earns
- their National Insurance category (this depends on their circumstances)
You have to keep National Insurance records for all employees earning more than £111 a week.
National Insurance to be paid on benefits
If you provide any employee benefits (eg health insurance, company cars) you might have to pay Class 1A National Insurance contributions on these. This depends on the benefit.
Some small or irregular benefits can be brought together in a single annual payment called a Pay As You Earn (PAYE) Settlement Agreement. You’ll have to pay Class 1B National Insurance on these.
Workers not on your payroll
Anyone who does work for you but is not on your payroll (eg self employed, volunteers), is responsible for paying their own National Insurance contributions.
2. Calculating and paying National Insurance contributions
Calculating National Insurance contributions
You calculate your employees' National Insurance contributions using your PAYE payroll system.
You'll need each employee's National Insurance category for this.
If you do your payroll manually and don't use software, the HM Revenue and Customs (HMRC) National Insurance calculator will help you calculate the amounts you need to enter into your payroll.
There’s a separate calculator for calculating National Insurance contributions for company directors.
HMRC also has information on payroll and National Insurance contribution calculations.
Making payments
Most employers pay Class 1 National Insurance contributions by direct debit, which you set up when you register as an employer with HMRC.
There are other ways of paying Class 1 if you don't want to pay by direct debit.
HMRC also has information on paying Class 1A and on paying Class 1B.
3. Deadlines for National Insurance contribution payments
Class 1 National Insurance contributions are part of your monthly Pay As You Earn payments.
Class 1A contributions on expenses and benefits are calculated separately at the end of the year. These have to be in HM Revenue and Customs’ (HMRC) account by 22 July if you pay electronically or by 19 July if you send a cheque.
If you pay Class 1B on employee benefits your payments have to be in HMRC’s account by 22 October (19 October if you pay by cheque).
HMRC has detailed information on National Insurance payment deadlines.
4. National Insurance category letters
You need to know an employee's National Insurance category to work out how much to pay for them. If you use Pay As You Earn (PAYE) payroll software it'll ask you for the category letter to calculate your contributions.
An employee’s National Insurance category letter depends on whether they have a separate (contracted-out) pension scheme and opted out of paying into the State Pension.
Most employees are category A or D.
Employees not in contracted-out pension schemes
| Category letter | Employee group |
|---|---|
| A | All employees apart from the ones in groups B, C and J in this table. |
| B | Married women and widows entitled to pay reduced Class 1 contributions. |
| C | Employees over the State Pension age. |
| J | Employees who can defer full Class 1 payments because they’re already paying National Insurance contributions in another job. |
Employees in a salary-related contracted-out scheme
| Category letter | Employee group |
|---|---|
| D | All employees apart from the ones in groups E, C and L in this table. |
| E | Married women and widows entitled to pay reduced Class 1 contributions. |
| C | Employees over the State Pension age. |
| L | Employees who can defer full Class 1 payments because they’re already paying National Insurance contributions in another job. |
Employees in a money-purchase contracted-out scheme
This kind of scheme ended in April 2012 but some of your employees might still be part of one.
| Category letter | Employee group |
|---|---|
| F | Tax years before 2012 to 2013 only: all employees apart from the ones in groups G, C and S in this table. |
| G | Tax years before 2012 to 2013 only: married women and widows entitled to pay reduced Class 1 National Insurance contributions. |
| C | Employees over the State Pension age. |
| S | Tax years before 2012 to 2013 only: employees who can defer full Class 1 payments because they’re already paying National Insurance contributions in another job. |
When an employee reaches State Pension age
You have to change their National Insurance category to ‘C’ in your PAYE system. They need to show you proof of their date of birth before you do this. You must continue to pay contributions for them.
Mariners and deep sea fishermen
HMRC has detailed information on National Insurance for mariners and deep sea fishermen.
Download 'Mariner and deep sea fishermen contributions for employers' (PDF, 2.2MB)
5. National Insurance contribution rates
There are 2 parts to Class 1 National Insurance contributions:
- primary contributions which you deduct from your employee's pay
- secondary contributions which you pay on the earnings paid to employees
Both types of contributions depend on:
- the employee's National Insurance category
- the employee's earnings
Employee Class 1 contributions rates (primary) for the tax year 2014 to 2015
The following table shows the amount you have to deduct from your employee’s pay. This depends on their earnings. No deductions need to be made on earnings below £111 a week.
| Category letter | £111 to £153 a week | £153.01 to £770 a week | £770.01 to £805 a week | Balance over £805 a week | Rebate on earnings above £111 to and including £153 a week |
|---|---|---|---|---|---|
| A | 0% | 12% | 12% | 2% | N/A |
| B | 0% | 5.85% | 5.85% | 2% | N/A |
| C | NIL | NIL | NIL | NIL | N/A |
| D | 0% | 10.60% | 12% | 2% | 1.40% |
| E | 0% | 5.85% | 5.85% | 2% | NIL |
| J | 0% | 2% | 2% | 2% | N/A |
| L | 0% | 2% | 2% | 2% | 1.40% |
Employer Class 1 contribution rates (secondary) for the tax year 2014 to 2015
The following table shows the amount you have to pay towards an employee's National Insurance. This depends on their earnings. No payments have to be made on earnings below £111 a week.
| Category letter | £111 to £153 a week | £153.01 to £770 a week | £770.01 to £805 a week | Balance over £805 a week | Rebate on earnings above £111 to and including £153 a week |
|---|---|---|---|---|---|
| A | 0% | 13.8% | 13.8% | 13.8% | N/A |
| B | 0% | 13.80% | 13.8% | 13.8% | N/A |
| C | 0% | 13.80% | 13.8% | 13.8% | N/A |
| D | 0% | 10.40% | 13.8% | 13.8% | 3.4% |
| E | 0% | 10.40% | 13.8% | 13.8% | 3.4% |
| J | 0% | 13.80% | 13.8% | 13.8% | N/A |
| L | 0% | 10.40% | 13.8% | 13.8% | 3.4% |
Class 1A and Class 1B rates
The 2014 to 2015 rate for National Insurance on benefits for Class 1A and 1B is 13.8%.