NI Category Letters Explained: What Yours Means

Your National Insurance category letter appears on your payslip and determines the rate at which you and your employer pay NI contributions. Most employees are category A, but if you are under 21, over State Pension age, an apprentice, or a veteran, a different letter applies: and it can make a significant difference to your deductions.

The main NI categories

Category	Who it applies to	Employee rate (PT to UEL)	Employee rate (above UEL)
A	Most employees aged 21 to State Pension age	8%	2%
B	Married women/widows with reduced-rate election	1.85%	2%
C	Employees over State Pension age	0%	0%
F	Freeport employees (category A equivalent)	8%	2%
H	Apprentices under 25	8%	2%
I	Freeport employees (category B equivalent)	1.85%	2%
J	Employees with deferred NI	2%	2%
L	Freeport employees (category C equivalent)	0%	0%
M	Employees under 21	8%	2%
S	Freeport employees (category J equivalent)	2%	2%
V	Veterans in first year of civilian employment	0%	2%
Z	Employees under 21 with deferred NI	0%	2%

The employee rates for categories H, M, and A are the same, but the employer rates differ. For categories H and M, the employer pays 0% on earnings up to the Upper Secondary Threshold (£50,270), which makes hiring young people and apprentices cheaper for employers.

How your category is determined

Your employer assigns your NI category based on your circumstances:

• Age: under 21 = M, 21 to State Pension age = A, over State Pension age = C
• Apprenticeship: under 25 and on an approved apprenticeship = H
• Veteran status: first 12 months of civilian employment after leaving the armed forces = V
• Reduced-rate election: married women or widows who elected for the reduced rate before 1977 = B

Your employer should update your category automatically when your circumstances change (for example, when you turn 21, your category should change from M to A).

Checking your category letter

Your NI category letter appears on your payslip, usually near the NI deduction or your NI number. If you believe the wrong category has been applied:

1. Check your age and employment status against the table above
2. Raise it with your payroll department
3. If unresolved, contact HMRC on 0300 200 3300

An incorrect category can result in you paying too much or too little NI. While overpayments can be refunded, underpayments may need to be corrected to protect your NI record and benefit entitlements.

Worked example: Category C (over State Pension age)

You are 67 years old and earn £2,500 per month. On category C:

1. Employee NI: £0.00 (no employee NI above State Pension age)
2. Employer NI: (£2,500 - £758.33) x 0.138 = £240.35 (employer still pays)

Your payslip should show zero NI deducted. If it shows a deduction, your employer may have the wrong category.

Category J: deferred NI

If you have more than one job and your combined earnings exceed the Upper Earnings Limit, HMRC may issue a deferment certificate for one of your jobs. This changes your category to J, meaning you pay only 2% on all earnings above the Primary Threshold (instead of 8% up to the UEL and 2% above).

Deferment prevents you from overpaying NI across multiple employments. At the end of the tax year, HMRC reconciles your total NI and issues a refund or additional charge if necessary.

Frequently Asked Questions

What is the most common NI category?

Category A is by far the most common. It applies to most employees aged 21 to State Pension age who are not apprentices, veterans, or on a reduced-rate election.

Does my NI category affect my State Pension entitlement?

Yes. Your NI contributions build qualifying years towards the State Pension. If you are on category C (over State Pension age), you do not pay NI and do not accrue further qualifying years. Categories B and J may also affect your record differently.

Can I choose my NI category?

No. Your category is determined by your circumstances and assigned by your employer based on HMRC rules. You cannot opt for a different category.

What happens when I turn 21?

Your employer should change your category from M to A. The employee NI rate stays the same (8%), but the employer NI rate increases. This change should happen automatically in the pay period that includes your 21st birthday.

I am a veteran. How do I get category V?

Inform your employer that you are a veteran in your first 12 months of civilian employment. They will need to verify your status and apply category V. This gives your employer a 0% NI rate on your earnings up to the Upper Secondary Threshold, which can make you a more cost-effective hire.

Sources

• National Insurance rates and categories (gov.uk)
• National Insurance category letters (gov.uk)
• Rates and thresholds for employers (gov.uk)