Quick Menu
Class 1 National Insurance
Class 1 National Insurance is deducted at source from salaried income.There are two types of Class 1 National Insurance, Employees Class 1 National Insurance and Employers Class 1 National Insurance. Employees National Insurance is paid by the employee on salaried/bonus income received. Employers National Insurance is paid by the employer on salaried/bonus income paid to the employee.
As a contractor it is possible to reduce the level of Class 1 National Insurance paid by claiming legitimate business expenses incurred in the course of a temporary site based contract. The value of such expenses reduces the gross level of salary and consequently reduces the amount of Class 1 National Insurance payable.
What is Class 1 Employees National Insurance?
Class 1 Employees National Insurance is payable by an employee on salaried income. It is levied at a rate of 11% between the primary threshold and the upper earnings limit. Any Income above the upper earnings limit is taxed at a rate of 1%. Therefore a ‘cap’ is in place to reduce the level of national insurance paid by high earners.Employees Class 1 National Insurance is applied as detailed below:
- 0% below the Primary threshold of £110 per week
- 11% between the Primary threshold (£110 pw) and the Upper Earnings Limit (£844 pw)
- 1% on earnings above the Upper Earnings Limit of £844 per week
What is Class 1 Employers National Insurance?
Employers National Insurance is payable by the employer on an employees salary and benefits. Employers National Insurance is levied at a flat rate of 12.8% above the secondary threshold; there is no upper limit or ‘capping’.Employer Class 1 National Insurance is applied as detailed below:
- 0% below the Secondary threshold of £110
- 12.8% above the Secondary threshold of £110
