National Insurance Explained: Rates, Thresholds, and Your Payslip

National Insurance (NI) is a tax on earnings that funds state benefits including the State Pension, statutory sick pay, and maternity allowance. If you are employed in the UK and earn above a certain threshold, your employer deducts NI contributions from your pay alongside income tax. This guide explains how NI is calculated, what the current rates are, and how to check the figure on your payslip.

How NI differs from income tax

Although both are deducted from your pay, National Insurance and income tax are separate charges with different rules. Income tax is based on your cumulative earnings and tax code. NI is calculated on each pay period independently, with no cumulative element and no personal tax code.

The key practical differences:

• NI is calculated per pay period, not cumulatively across the tax year
• NI has its own thresholds, which are different from income tax thresholds
• NI stops being payable when you reach State Pension age (income tax does not)
• NI contributions build your entitlement to certain state benefits

Current NI rates and thresholds

For the current tax year, most employees fall under NI category A. The Class 1 employee rates are:

Earnings band	Weekly	Annual equivalent	NI rate
Below Primary Threshold	Up to £242	Up to £12,570	0%
Primary Threshold to Upper Earnings Limit	£242.01 to £967	£12,571 to £50,270	8%
Above Upper Earnings Limit	Over £967	Over £50,270	2%

Your employer also pays NI on your earnings (at 15% above the Secondary Threshold of £5,000 from April 2025), but this does not appear as a deduction on your payslip.

Worked example

You earn £2,800 gross per month (£33,600 per year), paid monthly, NI category A.

1. Monthly Primary Threshold: £12,570 / 12 = £1,047.50
2. Monthly Upper Earnings Limit: £50,270 / 12 = £4,189.17
3. NI-able earnings: £2,800.00 - £1,047.50 = £1,752.50
4. NI at 8%: £1,752.50 x 0.08 = £140.20

Your payslip should show approximately £140.20 in National Insurance for the month.

NI category letters

Your NI category letter determines which rates apply to you. Most employees are category A, but other categories exist for specific circumstances:

• A: standard rate for most employees aged 21 and over
• B: married women and widows with a valid reduced-rate election
• C: employees over State Pension age (no employee NI, but employer NI still applies)
• H: apprentices under 25
• M: employees under 21
• V: veterans in their first year of civilian employment

Your category letter appears on your payslip, usually near the NI deduction. If you are unsure which category applies to you, our guide on NI category letters explains each one.

What NI pays for

Your NI contributions build your entitlement to several state benefits:

• State Pension: you need 35 qualifying years of NI contributions to receive the full new State Pension
• Contribution-based Jobseeker's Allowance
• Employment and Support Allowance
• Maternity Allowance
• Bereavement benefits

If you have gaps in your NI record (for example, from periods of unemployment or low earnings), you can check your record and make voluntary contributions to fill them. This can be done through your Personal Tax Account on gov.uk.

Checking NI on your payslip

To verify your NI deduction:

1. Find your gross pay for the period
2. Subtract the monthly Primary Threshold (£1,047.50 for monthly pay)
3. Multiply the result by 0.08 (assuming you are below the Upper Earnings Limit)
4. Compare with the NI figure on your payslip

If the figures do not match, check your NI category letter. Categories B, H, and M have different rates. You can also run your figures through our payslip checker for a detailed comparison.

NI if you have multiple jobs

If you have more than one job, NI is calculated separately for each employment. There is no mechanism for your employers to combine your earnings. This means you could end up paying NI on earnings from one job that, when combined with the other, would push you above the Upper Earnings Limit.

If you believe you have overpaid NI because of multiple jobs, you can apply to HMRC for a refund at the end of the tax year. HMRC may also issue a deferment notice if your combined earnings are expected to exceed the Upper Earnings Limit, which reduces the NI charged on one of your jobs.

Frequently Asked Questions

Do I pay NI if I am self-employed?

Self-employed people pay Class 2 and Class 4 NI through Self Assessment, not through PAYE. The rates and thresholds are different from Class 1 employee contributions.

When do I stop paying NI?

You stop paying employee NI when you reach State Pension age. Your employer continues to pay employer NI on your earnings, but nothing further is deducted from your pay. Your NI category changes to C at that point.

Can I check my NI record online?

Yes. You can view your NI record, including qualifying years and any gaps, through your Personal Tax Account on gov.uk. The service also shows whether you can make voluntary contributions to fill gaps.

Is NI deducted from my pension income?

No. NI is only charged on employment and self-employment earnings. Pension income, whether from a workplace pension or the State Pension, is not subject to NI, though it may be subject to income tax.

Why is my NI deduction different from my colleague's on the same salary?

The most likely reason is a different NI category letter. For example, employees under 21 (category M) pay a lower rate on earnings up to the Upper Earnings Limit. Differences in salary sacrifice arrangements can also affect the NI-able earnings figure.

Sources

• National Insurance rates and categories (gov.uk)
• Check your National Insurance record (gov.uk)
• National Insurance: introduction (gov.uk)