National Insurance: the basics

National Insurance contributions for employers and employees

Different types of National Insurance contributions (NICs) are calculated and collected in different ways.

Class 1 NICs

Employers are responsible for calculating, deducting and paying Class 1 primary NICs (employees' contributions), to HM Revenue & Customs (HMRC) on behalf of all employees, including directors, earning above the earnings threshold. These must be deducted from their earnings.

Employers (or those treated as the employer if the actual employer is outside the UK) must also calculate and pay Class 1 secondary NICs (employers' contributions) for all employees earning above the earnings threshold. Employers must keep adequate records showing how NICs were calculated and what payments have been made for each employee. See our guide on Class 1 and Class 1A National Insurance contributions.

Class 1A NICs

Employers must calculate and pay Class 1A NICs due on taxable benefits given to employees. See our guide on Class 1 and Class 1A National Insurance contributions.

Class 1B NICs

These are only paid by employers who have a PAYE (Pay As You Earn) Settlement Agreement with HMRC.

Class 3 NICs

These are paid voluntarily by individuals who want to protect their right to certain benefits, but have not paid sufficient contributions. Individuals are responsible for finding out if they need to pay Class 3 NICs and for setting up a method of payment. See our guide on Class 3 National Insurance contributions.

Use our interactive tool to identify the National Insurance contributions you must pay.

The HMRC Business Payment Support Service (BPSS)

A new business support service has been launched by HMRC to help businesses struggling to meet tax, National Insurance or other tax payments.

If you are concerned that you may not be able to pay amounts that are owed or will soon be owed to HMRC, you can contact the new HMRC BPSS. HMRC staff will review your situation and discuss temporary payment arrangements tailored to your business' circumstances. You can contact the HMRC Business Payment Support Service Helpline on Tel 0845 302 1435.

Find out how the HMRC BPSS can help businesses.

Subjects covered in this guide

• Introduction
• National Insurance contribution types
• National Insurance contributions for employers and employees
• National Insurance contributions for the self-employed
• I'm both an employer and an employee

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