National Insurance Contributions

Class 1 - Employed and contracted-out - Rates and thresholds

  2016/17 2017/18
  Employee Employer Employee Employer
Below Lower Earnings Limit(LEL) Nil Nil Nil Nil
Above LEL to Primary Threshold(PT) 0% 0% 0% 0%
Above PT to Upper Earnings Limit(UEL) 12.0% 13.8% 12.0% 13.8%
Above UEL 2.0% 13.8% 2.0% 13.8%
NIC rebate between LEL and ET 1.4% 3.4% 1.4% 3.4%

As a result of the proposed introduction of the single-tier State Pension, contracting out via a defined benefit pension scheme is no longer possible from 6 April 2016.

From 6 April 2015 employers are no longer required to pay Class 1 NICs on earnings up to the UEL for any employee aged under 21

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