Online Calculators since 2009
If you're self employed, or working for someone else, it can seem quite daunting when you're told you have to pay someone and you have little to no control over it. Below the process has ben explained and will show you that you don't have to worry too much and it’s actually a fairly simple process.
National Insurance is a number of contributions that are paid to the UK Government in order to provide benefits to employees. These benefits can be:
So it's not such a bad thing because you do get a return from it such as your pension and sick pay when you qualify for it.
Not everyone has to pay National Insurance Contributions (NIC). In order to qualify you must:
In order to pay NIC you will need a National Insurance Number, this is generally posted out to you on, or just after, your 16thbirthday. This number will stay with you for your entire life and never change.
There are different classes of National Insurance. The type that you pay will vary on the type of employment you are in and the amount of money that you earn.
National Insurance class
Employees earning more than £162 a week and under State Pension age - they’re automatically deducted by your employer
Class 1A or 1B
Employers pay these directly on their employee’s expenses or benefits
Self-employed people - you do not have to pay if you earn less than £6,205 a year (but you can choose to pay voluntary contributions)
Voluntary contributions - you can pay them to fill or avoid gaps in your National Insurance record
Self-employed people earning profits over £8,424 a year
Your National Insurance number is alphanumeric and 9 digits long, it will never change. It ensures that any NIC you pay will be logged against your name. It will always be in the format of AA 11 11 11 A. Many different organisations can request your National Insurance number as a form of proof of entitlement to work in the UK. Your National Insurance number can be found on:
It is important that these organisations/people know your National Insurance Number:
To protect against fraud you should never reveal your National Insurance Number to anyone who doesn't need it.
Before someone starts working for you, ensure they provide you with their National Insurance number for payroll. Without it, you won't be able to run payroll and submit their details to HMRC.
It's always worth reading any starter guides for your specific payroll software, as these normally tell you what information would be required including their name, date of birth and address.
It’s your responsibility to ensure you have the correct information to pay your employees and ensure all deductions are made for HMRC. See Employing staff for the first time for more information.
National Insurance can be tricky if you don't know much about it but there is plenty of information and guidance available on the HMRC website.