The short version: Class 1 National Insurance is what employees pay. If you’re employed and earn above the threshold, it gets deducted from your wages automatically through PAYE.
How much do you pay?
There’s a lower earnings limit below which you don’t pay anything. Above that, you pay a percentage of your earnings. The rate drops once you hit the higher rate threshold. Check gov.uk for current thresholds and rates.
What does it go towards?
Your NI contributions build up your entitlement to things like the State Pension and Jobseeker’s Allowance. No contributions, no entitlement.
What if I’m employed and self employed?
You’ll pay Class 1 on your employment income and Class 4 on your self employment profits (if they’re high enough). The two run alongside each other.
Your employer also pays NI on top of what you pay. That’s a separate contribution and doesn’t come out of your wages.
Got questions about what you’re paying and why? Check with us and we’ll explain your situation.
