The table below shows the current rates and earnings limits for National Insurance contributions, as determined by the HM Revenue & Customs, compared with those of the 2011-12 year. All figures are weekly unless stated otherwise.

There's one more class of National Insurance contribution; Class 3. These are fixed, voluntary contributions of between £12.60 per week that may be paid by people who would otherwise fail to qualify for retirement pension and some other kinds of benefit, usually because they have not yet contributed enough Class 1 or Class 2 contributions. This is not usually something that you as an employer have to be concerned about; it's a matter for the individual concerned to discuss with the HMRC.


If all this sounds complicated, it's not quite as bad as it sounds. Self-employed people pay Class 2 and (if they're earning enough) Class 4. Employed people pay Class 1 and their employers pay Class 1A. Anyone wanting to make up a deficit so that they can claim their pension pays Class 3. The varying rates for contracting out and other factors are all described in the leaflets and forms available from the HMRC, so as long as you - or your accountant - make sure that a payment and monitoring system is in place at the start of the financial year, National Insurance should be no more complicated than VAT calculations.

Rates and earnings limits for NI contributions

Item 2011/12 2012/13
Lower Earnings Limit£102£107
Upper Earnings Limit£817£817
Primary Threshold£139£146
Secondary Threshold£136£144
Employee's contributions 12% 12%
Employee's Contracted-out Rebate1.6%1.4%
Married Women Reduced Rate5.85%5.85%
Employer's Contribution Rates13.8%13.8%
Employers' contracted-out rebate, salary-related schemes3.7%3.4%
Employers' contracted-out rebate, money-purchase schemes1.4%Abolished from 6th April 2012
Class 2 Self employed Contribution£2.50£2.65
Class 2 Small Earnings Exception£5,315 per year £5,595 per year
Special Class 2 rate for share fishermen£3.15£3.30
Special Class 2 rate for volunteer development workers£5.10£5.35
Class 3 rate£12.60£13.25
Class 4 Contributions - Upper Profits Limit£42,475 per year£42,475 per year
Class 4 Contributions - Lower Profits Limit £7,225 per year£7,605 per year
Class 4 rate between lower profits limit and upper profits limit9%9%
Class 4 rate above upper profits limit2%2%