What is a National Insurance category letter?

Every employee on UK PAYE is assigned a single National Insurance category letter that tells the payroll software which schedule of NI rates to apply. The letter combines information about your age, your status (apprentice, veteran, freeport / investment zone worker), and any deferral or relief that applies. The default for most workers is Cat A.

Which NI category should I be on if I am over State Pension age?

Once you reach State Pension age, your employee NI is zero. The category letter that captures this for ordinary employees is Cat C — meaning the employer still pays employer NI, but your payslip should show £0 employee NI. If you reach State Pension age mid-year, your employer should switch you to Cat C from your birthday. Continuing to pay employee NI after State Pension age is a clear red flag.

What about Cat H (apprentice) and Cat V (veteran)?

Cat H is the default for apprentices under 25 — the employee pays NI at the normal rate, but the employer pays zero employer NI on earnings up to the Apprentice Upper Secondary Threshold. Cat V is for veterans in their first 12 months of civilian employment after leaving HM Forces — again, employee NI is normal, employer NI is zero up to the Veteran Upper Secondary Threshold. Both are reliefs that apply to the employer, not the worker.

My category is Cat X — is that correct?

Cat X is the "no NI to deduct" category. It is correct for employees under 16, for those whose earnings are below the Lower Earnings Limit, or in certain other narrow circumstances. If you are aged 16 to State Pension age, working in the UK and earning above the Primary Threshold, Cat X is almost certainly wrong and you should query it with payroll.

Educational guidance only — not regulated tax or payroll advice. The specific 2026/27 thresholds shift with each Budget; verify against the current HMRC publication before relying on a figure.

UK · Guides · NI categories

UK National Insurance categories — every letter explained

One letter on your payslip, “NI Category: A” or “Cat C”, quietly drives a large chunk of your take-home pay and your employer’s payroll cost. This guide walks through every category in force for 2026/27, who it applies to, what it does on the employee and employer side, and the red flags that mean payroll has put you on the wrong one.

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The basics

UK National Insurance is calculated using two main thresholds and two main rates. The Primary Threshold (PT) is the point above which employee NI starts. The Upper Earnings Limit (UEL) is the point above which the rate drops to the lower additional rate. On the employer side the equivalent boundary is the Secondary Threshold (ST).

Every employee has exactly one NI category letter at any time. That single letter answers the questions: do they pay employee NI at all? Does the employer pay employer NI? At what thresholds do the rates kick in? Does any deferral or relief apply?

The specific PT, UEL, ST, AUST, VUST and FUST values for 2026/27 shift with each Budget. Estimate, verify against the current HMRC “Rates and thresholds for employers” publication on gov.uk before quoting a number.

Every NI category at a glance

Letter	Who	Employee NI	Employer NI
A	Default category for most employees aged 21 to State Pension age.	Standard employee NI rates on earnings between the Primary Threshold and the Upper Earnings Limit, then the lower additional rate above the UEL.	Standard employer NI on earnings above the Secondary Threshold.
B	Married women and widows entitled to pay reduced-rate NI under elections made before 1977. Now very rare.	Reduced employee NI rate.	Standard employer NI.
C	Employees over State Pension age.	Zero. State Pension age means no more employee NI, full stop.	Standard employer NI is still due.
F	Employees working in a Freeport tax site (single position).	Standard employee NI rates.	Zero employer NI on earnings up to the Freeport Upper Secondary Threshold for the first 36 months of employment.
H	Apprentices under 25 on a recognised UK apprenticeship.	Standard employee NI rates.	Zero employer NI on earnings up to the Apprentice Upper Secondary Threshold.
I	Freeport-based married women / widows on reduced-rate election (combination of B + F).	Reduced employee NI rate.	Zero employer NI up to the Freeport Upper Secondary Threshold.
J	Employees deferring NI because they already pay enough Class 1 NI in another job.	Additional rate only above the UEL, no main rate on this employment.	Standard employer NI.
L	Freeport-based deferred (combination of J + F).	Additional rate only.	Zero employer NI up to the Freeport Upper Secondary Threshold.
M	Employees under the age of 21.	Standard employee NI rates (same as Cat A).	Zero employer NI on earnings up to the Upper Secondary Threshold.
S	Investment Zone / Freeport-based employees over State Pension age in certain combinations.	Zero employee NI (because over State Pension age).	Zero employer NI up to the relevant Upper Secondary Threshold.
V	Veterans in their first 12 months of civilian employment after leaving HM Forces.	Standard employee NI rates.	Zero employer NI on earnings up to the Veteran Upper Secondary Threshold.
X	No NI to deduct, employees under 16, or earnings below the Lower Earnings Limit, or other narrow cases.	Zero employee NI.	Zero employer NI.
Z	Under-21s who have also elected to defer NI on this employment because they pay enough elsewhere.	Additional rate only above the UEL.	Zero employer NI on earnings up to the Upper Secondary Threshold.

Worked example — Cat A on £35,000

The default UK case. A 30-year-old employee on £35,000 gross, Cat A, working a single PAYE job. The employee NI calculation applies the main rate to earnings between the Primary Threshold and the Upper Earnings Limit. The employer NI calculation applies the standard employer rate to earnings above the Secondary Threshold. The employer relief schemes (Cat M, H, V) do not apply.

We have deliberately not committed to a numeric figure here because the underlying thresholds and rates can be re-set by Budget. Use the PayslipIQ payslip check on /uk/check to apply the current rates against an uploaded payslip.

Worked example — Cat C after State Pension age

A 67-year-old employee who reached State Pension age last November. From the first payslip after their birthday, the category should be C and the “NI” line on the payslip should read £0. The employer is still paying employer NI in the background, but that does not appear in the employee’s deductions.

If you reached State Pension age mid-month, the employer is entitled to operate Cat A for the partial period leading up to your birthday and Cat C for the remainder. Some payroll software simply switches at the start of the next pay period; HMRC accepts either approach.

Worked example — Cat M for an under-21

A 19-year-old retail assistant on £21,000. The employee NI calculation is identical to Cat A, the under-21 still pays the main rate on earnings above the PT. The difference is that the employer pays zero employer NI on earnings up to the Upper Secondary Threshold. The relief stops at the employee’s 21st birthday, the category then switches automatically to A.

Worked example — Cat H for an apprentice

A 22-year-old on a Level 4 apprenticeship. Cat H gives the employer the same kind of relief as Cat M, but using the Apprentice Upper Secondary Threshold and only while the apprenticeship is in force and the worker is under 25. When either condition ends (apprenticeship completes, employee turns 25), the category should switch to A.

Red flags

The wrong NI category is a very common payroll error, and the most expensive ones, paying NI when you should not, or missing an employer relief that should apply, are easy to spot if you know what to look for.

Paying employee NI after State Pension age: Once you reach State Pension age, your category should switch to C and your employee NI should drop to £0 on the next pay run. If your payslip still shows a non-zero "NI" deduction in the month after your State Pension age birthday, query it immediately. Continuing to pay employee NI when you should not is one of the most common payroll errors and is fully refundable.
Apprentice not on Cat H: If you are a UK apprentice under 25 and the category on the payslip is "A" instead of "H", your employer is missing the employer-NI relief but you personally pay the same. Worth flagging because if HMRC corrects it later, the employer will not recover the relief retrospectively without an RTI amendment.
Under-21 not on Cat M: Similar pattern. As an employee under 21, Cat A and Cat M produce the same NI deduction for you, but the employer-NI cost is different. Flag it because your employer ought to be claiming the relief.
Cat X applied to someone earning above the Primary Threshold: Cat X means "no NI to deduct". If you are aged 16 to State Pension age, working in the UK and earning above the Primary Threshold, Cat X is almost certainly wrong. The most common cause is a starter declaration that was not properly processed at the new employer. Fixing it now is far easier than letting HMRC reconcile it after the tax year ends.

How to fix a wrong category

Confirm the category and your circumstances. Cat A is the default, if you fit a special case (under-21, apprentice, veteran, State Pension age), gather the evidence: birth certificate, apprenticeship contract, military discharge, etc.
Raise it with payroll in writing. Cite the category you believe should apply and the date from which it should apply.
Confirm via HMRC if necessary. Your HMRC personal tax account shows the category your employer is reporting through RTI; that is the authoritative record.
Ask for a payroll adjustment in the current tax year where possible. Mid-year fixes flow through PAYE and refund any over-paid NI automatically.
If the year has already ended, HMRC will reconcile via P800. Keep your evidence.

Frequently asked questions

What is a National Insurance category letter?: Every employee on UK PAYE is assigned a single National Insurance category letter that tells the payroll software which schedule of NI rates to apply. The letter combines information about your age, your status (apprentice, veteran, freeport / investment zone worker), and any deferral or relief that applies. The default for most workers is Cat A.
Which NI category should I be on if I am over State Pension age?: Once you reach State Pension age, your employee NI is zero. The category letter that captures this for ordinary employees is Cat C, meaning the employer still pays employer NI, but your payslip should show £0 employee NI. If you reach State Pension age mid-year, your employer should switch you to Cat C from your birthday. Continuing to pay employee NI after State Pension age is a clear red flag.
Why is my NI category Cat M, and what does it do?: Cat M is the default for employees under the age of 21. The employee NI rate is identical to Cat A, but the employer pays zero employer NI on earnings up to the Upper Secondary Threshold, a relief designed to lower the cost of employing under-21s. You see Cat M on the payslip; the saving is on the employer side.
What about Cat H (apprentice) and Cat V (veteran)?: Cat H is the default for apprentices under 25, the employee pays NI at the normal rate, but the employer pays zero employer NI on earnings up to the Apprentice Upper Secondary Threshold. Cat V is for veterans in their first 12 months of civilian employment after leaving HM Forces, again, employee NI is normal, employer NI is zero up to the Veteran Upper Secondary Threshold. Both are reliefs that apply to the employer, not the worker.
My category is Cat X — is that correct?: Cat X is the "no NI to deduct" category. It is correct for employees under 16, for those whose earnings are below the Lower Earnings Limit, or in certain other narrow circumstances. If you are aged 16 to State Pension age, working in the UK and earning above the Primary Threshold, Cat X is almost certainly wrong and you should query it with payroll.

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Last reviewed

Last reviewed: 16 May 2026

Next review: 6 April 2027

Reviewed each tax year and immediately after any Budget that changes NI rates or thresholds.

Educational guidance only — not regulated tax or payroll advice. Always verify against the current HMRC “Rates and thresholds for employers” publication and with payroll or HMRC before acting.