National Insurance

2020/21

2020/21	Class 1 Primary - Employees' NIC
Category Letter	Below £120	£120 - £183	£183 - £962	Over £962
	Lower Earnings Limit	Lower Earnings to Primary Threshold	Primary Threshold to Upper Limit	Above Upper Limit
A	0%	0%	12%	2%
B	0%	0%	5.9%	2%
C	N/A	N/A	N/A	N/A
H	0%	0%	12%	2%
J	0%	0%	2%	2%
M	0%	0%	12%	2%
Z	0%	0%	2%	2%

2020/21	Class 1 Secondard - Employers' NIC
Category Letter	Below £120	£120 - £169	£169 - £962	Over £962
	Lower Earnings Limit	Lower Earnings to Secondary Threshold	Secondary Threshold to Upper Limit	Above Upper Limit
A	0%	0%	13.8%	13.8%
B	0%	0%	13.8%	13.8%
C	N/A	N/A	13.8%	13.8%
H	0%	0%	0%	13.8%
J	0%	0%	13.8%	13.8%
M	0%	0%	0%	13.8%
Z	0%	0%	0%	13.8%

National Insurance Category Letters
Letter	Employee group
A	All employees except those who fall into below categories
B	Eligible married women and widows paying reduced NIC
C	Over state pension age
J	Deferred NIC through already paying in other employment
H	Apprentice under 25
M	Under 21
X	Does not pay NIC e.g. under 16
Z	Under 21 deferred through already paying in other employment

Other National Insurance Classes
Class	Rate	Detail
Class 1A	13.8%	On benefits in kind. Payable on 19th (paper) or 22nd July (online) following the end of the tax year.
Class 1B	13.8%	On PAYE Settlement Agreement benefits. Payable by 19th (Paper) or 22nd (Electronic) October following the end of the tax year.
Class 2	£3.05 per week, mandatory above £6,475 profits per annum	Voluntary contributions below annual profits of £6,475. £3.00 in 2019/20
Class 3	£15.30 per week	Voluntary contributions - £15.00 in 2019/20

Class 4 - Self-employed
Profits	2020/21	2019/20
Below £9,500	0%	0%
Between £9,500 and £50,000 per annum (£8,632 and £50,000 for 2019/20)	9%	9%
Over £50,000 per annum	2%	2%

NIC Thresholds
Category	Per Week
Lower Earnings Limit	£120.00
Primary (Employee) Threshold	£183.00
Secondary (Employer) Threshold	£169.00
Below £9,500	£962.00
Apprentice Upper Secondary Threshold (Under 25)	£962.00
Upper Earnings Limit	£962.00

Notes

Employment Allowance - Reduction in Employer's NIC of up to £4,000 per annum (limited to Employer's actual NIC). Effective from 6 April 2020.

Apprenticeship Levy - Employers are be required to pay the Levy, which is set at a rate of 0.5% of an employer's annual pay bill. This is collected through the PAYE system. The pay bill is the total amount of earnings liable to employer's Class 1 NIC, including earnings below the secondary threshold. Where the age-related secondary percentage of MC is 0% e.g for employees under the age of 21, such earnings are included in calculating the pay bill.

Employers receive an annual allowance of £15,000 to offset against payment of the Levy, and therefore the Levy will only be payable by employers who have to pay bilis in excess of £3million per year. Where two or more companies are connected, the allowance is spread between the companies.

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