National Insurance

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National Insurance

Class 1 Employees Employers*
Weekly earnings 2017/2018
On first £157 Over 21 NIL NIL
Under 21 NIL NIL
£157.01 to £866 Over 21 12% 13.8%
Under 21 or apprentice under 25 12% NIL
£886.01 and above Over 21 2% 13.8%
Under 21 2% 13.8%

Class 1A 13.8% NIC on benefits in kind payable on 19th/22nd July after the end of the tax year.
Class 1B 13.8% payable on PAYE Settlement Agreement benefits, tax due 19th/22nd October after the end of the tax year.
Class 2 Self employed flat rate of £2.85 per week.
Class 3 Voluntary contributions at a rate of £14.25 per week.
Class 4 – Self-employed earning rate 2017/18 2016/17
Profits between £8,164 (£8,060) and £45,000 (£43,000) per annum 9% 9%
Profits in excess of £45,000 (£43,000) per annum 2% 2%
* EMPLOYMENT ALOWANCE available from 6 April 2015. Reduction in Employer’s NIC of £3000 (maximum, or limited to actual Employer’s NIC, if lower) for the year.

Apprenticeship Levy: From 6 April 2017, employers will be required to pay the Apprenticeship Levy. The Levy is set at a rate of 0.5% of an employer’s annual pay bill and will be collected through the PAYE system. The pay bill is the total amount of earnings liable to employer’s Class 1 NIC, including earnings below the secondary threshold. Where the age-related secondary percentage of MC is 0% e.g for employees under the age of 21, such earnings are included in calculating the pay bill.

Employers receive an annual allowance of £15,000 to offset against payment of the Levy, and therefore the Levy will be payable only by employers who have to pay bilis in excess of £3million per year. Where two or more companies are connected, only one company can claim the allowance.

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