How much National Insurance do I pay?

NATIONAL Insurance is a tax all workers must pay once they earn a certain amount.

It goes into a pot that pays for benefits like sick pay and the state pension.

So you get out money when needed from making National Insurance contributions (NICs), as well as paying in.

A recent change in April this year that saw millions of workers paying 1.25% more NI.

But that was reversed again from November 6, 2023, saving workers £330 a year on average.

Rates fell from 13.25% to 12% and from 3.25% to 2% – the same as before April 2023.

How much National Insurance do I pay?

Most people now pay 12% NICs on any earnings between £242 and £967 a week.

That’s £1,048 and £4,189 a month.

Plus you have to pay 2% on anything you earn over £967 a week – or £4,189 per month.

The exact amount you pay will depend on how much you earn as it’s a percentage on earnings between these amounts.

What salary do you start paying National Insurance?

If you are employed, you start paying National Insurance when you are 16 or older and earning more than £242 a week.

You start paying NICs when you earn over £12,570 a year – the same threshold as for income tax.

The self-employed start paying when they make profits of at least £6,475 a year.

Those earning less than these amounts do not have to pay any National Insurance.

If you are employed and you have earnings from self-employment you might have to pay NICs on both amounts, if you make over these amounts.

If you’re self-employed you need to complete a self-assessment tax return and pay NICs and income tax yourself.

If you’re employed the company you work for deducts the tax and pays it to HMRC for you.

You can see your contributions by looking at your payslip.

Your National Insurance number is used to make sure that the correct contributions are made to your name.

Once you reach state pension age, you don’t need to pay it at all.

There are different types of National Insurance – known as “classes”, and the type you pay depends on your employment status and how much you earn, and whether you have any gaps in your National Insurance record.

Can I check how much National Insurance I’ve paid?

You can check how much National Insurance you’ve paid using the Government Gateway portal. You will need a login and password to do this.

If you do not have a login to the Government Gateway portal you can set one up, but will need your National Insurance number to do so.

You can check how much you have made in contributions during the current financial year, and check how many National Insurance credits you have received.

However, this portal will not give you an estimate of how much state pension you are entitled to.

You can also request for a paper version over-viewing your contributions if you want.

Can I opt out of National Insurance?

You cannot opt out if you are employed or self-employed, are aged 16 or over and earning above the minimum threshold.

If you are employed, your contributions will automatically be deducted from your take-home pay, so opting out is not possible anyway.

However, the self-employed have to manage these payments themselves.

If you become self-employed, you must tell HMRC as soon as possible.

You will then be required to complete a Self Assessment tax return every year.

This will be used to determine how much tax and National Insurance you should pay.