National Insurance Contributions Autumn Budget 2018

National Insurance Contribution (NIC) Rates for 2019/20

The Upper Earnings and Upper Profits Limits (beyond which employee NICs are charged at 2%) for 2019/20 increases from £46,350 to £50,000, to be in line with the new higher rate tax threshold.

The main NIC rates for 2019/20 are as follows: -

• Employee Class 1 NIC rate is 12% on earnings between the Primary Threshold (£166 per week - £8,632 pa) and Upper Earnings Limit (£962 per week - £50,000 pa).
• Employees Class 1 NIC on all earnings above the Upper Earnings Limit (£50,000 pa) is 2%.
• Employer Class 1 NIC on earnings above the Secondary Threshold (£166 per week - £8,632 pa) is 13.8%.
• Self-employed Class 2 flat NIC rate is £3.00 per week when profits are above £6,365 pa.
• Self-employed Class 4 NIC rate on profits between the Lower Profits Limit (£8,632 pa) and Upper Profits Limit (£50,000 pa) is 9% and 2% above £50,000 pa.

Employment Allowance reform

From April 2020 access to Employment Allowance reduced to employers with an employer NIC bill below £100,000 pa. The Employment Allowance discounts £3,000 off an employer NIC bill. Government claims that 99% of micro-businesses and 93% of small businesses will still benefit.