National insurance contributions

The Chancellor announced several future changes to national insurance contributions (NICs):

  • From 2011/12, the main and additional rates of employer, employee and self employed NICs will all increase by 0.5%.  This is in addition to the 0.5% increase for 2011/12 announced last year. Thus the main employee rate in 2011/12 will be 12% (currently 11%) and the additional rate will be 2% (currently 1%).
  • In 2011/12 the primary threshold and lower profits limit for NICs will rise above the previously announced levels by £570.
National insurance contributions 2010/11
Employees  
Lower earnings limit, primary Class 1 £97 a week
Upper accruals point £770 a week
Upper earnings limit, primary Class 1 £844 a week
Primary threshold £110 a week
Secondary threshold £110 a week
Employees' primary Class 1 rate

11% of £110.01 to £884 a week
1% above £884 a week

Employees' contracted-out rebate 1.6%
Married women's reduced rate 4.85%
Employers' secondary Class 1 rebate 12.8% on earnings above £110 a week
Employers' contracted-out rebate, salary-related schemes 3.7%
Employers' contracted-out rebate, money purchase schemes 1.4%
   
Self-employed  
Class 2 rate £2.40 a week
Class 2 small earnings exception £5,075 a year
Class 3 rate £12.05 a week
Class 4 rates 8% of £5,715 to £43,875 a year
1% above £43,875
 
© 9 December 2009. This summary is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking action on the basis of the contents of this summary. The summary represents our understanding of the law and HM Revenue and Customs practice as at 9 December 2009, which are subject to change. These proposals may be changed in the Spring 2010 Budget and subsequent legislation, or at any time.