National Insurance

National Insurance Contributions are payable by both employees and the self-employed if they are between the age of 16 and 65 for men or 16 and 60 for women.

Employees who are over the National Insurance threshold pay Class 1 contributions via the Pay As You Earn system before they receive their salary.

Employers also have to pay Class 1A National Insurance Contributions on any car and fuel benefit assessed on the employee. Since April 2000 the employer pays Class 1A National Insurance Contributions on all other taxable benefits in kind.

The self-employed may, depending on the level of their income, pay Classes 2 and 4.

Class 2 is usually paid monthly in arrears via direct debit. Class 4 is paid along with the payments on account of their income tax liabilities on 31st January and 31st July each year.

Some taxpayers may pay classes 1, 2 and 4 National Insurance or may have more than one employment. To avoid excess National Insurance contributions being paid there are two calculations that can be carried out. Any overpayments will be refunded.