08: National insurance contributions

Class 1 (Employees) Not Contracted out of State Second Pension S2P
2008/09 2007/08
Employee: Employee:

No NICs where earnings
are up to £105 a week
11% NICs on £105.01-£770 a week
1% NICs over £770 a week

No NICs where earnings
are up to £100 a week
11% NICs on £100.01-£670 a week
1% NICs over £670 a week
Employer: Employer:

No NICs on the first £105 a week
12.8% NICs over £105 a week

No NICs on the first £100 a week
12.8% NICs over £100 a week

   
Earnings limit or threshold 2008/09 2007/08
  Weekly Monthly Annual Weekly Monthly Annual
£ £ £ £ £ £
Lower limit (LEL) 90 390 4,680 87 377 4,524
NICs start 105 453 5,435 100 435 5,225
Upper limit (UEL) 770 3,337 40,040 670 2,904 34,840
             
Contracted-out S2P rebate 2008/09 2007/08
Reduction on band earnings £90.01-£770 pw £87.01-£670 pw
Employer rate reduction    
  • Salary-related scheme
3.7% 3.7%
  • Money-purchase scheme
1.4% 1.4%
Employee rate reduction 1.6%
1.6%
     
Class 1A (Employers) 2008/09
 2007/08
Most taxable employee benefits 12.8% 12.8%
     
Class 2 (Self-Employed) 2008/09 2007/08
Flat rate £2.30 pw
£119.60 pa		 £2.20 pw
£114.40 pa
If earnings over £4,825 pa £4,635 pa
     
Class 4 (Self-Employed) 2008/09 2007/08
On profits £5,435-£40,040 pa
8%		 £5,225-£34,840 pa
8%
  Over £40,040 pa
1%		 Over £34,840 pa
1%
     
Class 3 (Voluntary) 2008/09 2007/08
Flat rate £8.10pw
£421.20 pa		 £7.80pw
£405.60 pa

© 12 March 2008. This summary has been prepared very rapidly and is for general information only. The proposals are in any event subject to amendment before the Finance Act is passed. It is recommended you seek competent professional advice before taking any action on the basis of the contents of this publication.