National Insurance Contribution

In the UK, the amount of National Insurance Contributions (NIC) that you are required to pay depends on your income and the type of NIC you are liable for. Employees are typically required to pay Class 1 NIC, while employers are required to pay Class 1A and Class 1B NIC. The rate of NIC that you pay is based on your income bracket and is calculated as a percentage of your income. It is important to keep accurate records of your NIC payments, including invoices and receipts, to ensure that the correct amount has been paid.

Example

John is a employee of company “W” in the UK and earns £52,000 per year (£1,000 per Week). He pays National Insurance contributions (NICs) at the Class 1 rate.

John get paid £1,000 weekly

With personal allowance of 12,570 per year (£241.73 allowance per week)

$1000 - 241.73 = 758.27 Taxable Income Per Week$

Income Tax

• £145 tax rated at 20%
• £13.31 tax rated at 40%

NIC

• Paying nothing on the first £242
• 12% (£90.96) on the next £777
• 2% (£0.66) on the next £33

Total: John pays £91.62 per week as National Insurance Contribution