National Insurance Category Letters

Every UK NI category letter for 2026-27 — A, B, C, D, E, F, H, I, J, K, L, M, N, S, V, X and Z — with who it applies to, the employee rate, and the employer NI treatment.

Every NI category letter (2026-27)

Employee rates show the main-band rate then the above-Upper-Earnings-Limit rate (e.g. "8% / 2%"). Employer rates show where the 0% relief band (if any) ends.

Letter	Who it applies to	Employee NI	Employer NI
A	All employees apart from those in groups B, C, H, J, M, V and Z — the default category for most employees.	8% / 2%	15% above £5,000
B	Married women and widows with a valid Certificate of Election for the reduced-rate election.	1.85% / 2%	15% above £5,000
C	Employees over State Pension age. No employee NI is due, but employer NI still applies at the standard rate.	None	15% above £5,000
H	Apprentices under 25 on an approved apprenticeship.	8% / 2%	0% to £50,270, then 15%
J	Employees who can defer National Insurance because they're already paying it in another job.	2% flat	15% above £5,000
M	Employees under 21.	8% / 2%	0% to £50,270, then 15%
V	Veterans in their first job in civilian employment since leaving the armed forces.	8% / 2%	0% to £50,270, then 15%
X	Employees who don't have to pay National Insurance at all, for example because they're under 16.	None	Exempt (0%)
Z	Employees under 21 who can also defer National Insurance because they're already paying it in another job.	2% flat	0% to £50,270, then 15%

Freeport special tax site letters

Freeport letters mirror a standard letter for employee NI, but get employer relief up to the lower £25,000 Freeport Upper Secondary Threshold (FUST) instead of the standard £5,000 Secondary Threshold.

Letter	Who it applies to	Employee NI	Employer NI
F	All employees working in a Freeport special tax site, apart from those in groups I, L and S. (mirrors category A)	8% / 2%	0% to £25,000, then 15%
I	Married women and widows working in a Freeport special tax site with a valid Certificate of Election. (mirrors category B)	1.85% / 2%	0% to £25,000, then 15%
L	Employees working in a Freeport special tax site who can defer National Insurance. (mirrors category J)	2% flat	0% to £25,000, then 15%
S	Employees working in a Freeport special tax site who are over State Pension age. (mirrors category C)	None	0% to £25,000, then 15%

Investment Zone special tax site letters

Letter	Who it applies to	Employee NI	Employer NI
N	All employees working in an Investment Zone special tax site, apart from those in groups E, D and K. (mirrors category A)	8% / 2%	0% to £25,000, then 15%
E	Married women and widows working in an Investment Zone special tax site with a valid Certificate of Election. (mirrors category B)	1.85% / 2%	0% to £25,000, then 15%
D	Employees working in an Investment Zone special tax site who can defer National Insurance. (mirrors category J)	2% flat	0% to £25,000, then 15%
K	Employees working in an Investment Zone special tax site who are over State Pension age. (mirrors category C)	None	0% to £25,000, then 15%

How your category letter changes employer NI

Employer Class 1 NI is normally 15% on everything an employee earns above the £5,000 Secondary Threshold, with no upper limit. Four category letters change that:

H, M, V, Z — employer NI is 0% up to the Upper Secondary Threshold (UST for under-21s, AUST for apprentices, VUST for veterans — all set at £50,270/year, £967/week), then 15% above it.
D, E, F, I, K, L, N, S (Freeport/Investment Zone) — employer NI is 0% up to the lower Freeport/Investment Zone Upper Secondary Threshold (FUST, £25,000/year, £481/week), then 15% above it.
X — no employer NI at all.
A, B, C, J — no relief; standard 15% above the Secondary Threshold.

Getting a category letter wrong on your payroll directly changes your employer NI bill — an apprentice wrongly coded as A instead of H, for example, loses the 0% relief up to £50,270. Work out the total cost of employing someone, including the category letter's effect, with the Employer Cost Calculator, or the employer NI bill alone with the Employer NI Calculator.

How to find your NI category letter

Your NI category letter is printed on your payslip, usually next to or near the National Insurance deduction line, and on your P60 end-of-year summary. If you can't see it there, ask your payroll or HR team — it's part of the standard payroll record HMRC requires employers to keep (alongside your NI number and tax code). It's a single letter, sometimes shown alongside your gross pay and NI deducted for the period, e.g. "NI Category: A".

Common wrong-category-letter scenarios

A category letter should update automatically as your circumstances change, but payroll systems sometimes miss the trigger. Check for these:

Under 21 but coded as A — should be category M until the day before your 21st birthday, giving your employer 0% NI relief up to £50,270.
Apprentice under 25 but coded as A — approved apprentices under 25 should be category H, with the same employer relief as M.
Over State Pension age but still coded as A — should move to category C once you reach State Pension age. You stop paying employee NI entirely (employer NI is unaffected).
Veteran in first civilian job but coded as A — should be category V for the first 12 months after leaving the armed forces, giving your employer the same 0% relief as M/H up to £50,270.

If your category letter is wrong, the fix is usually a payroll correction going forward plus, if too much NI was deducted, an adjustment on a future payslip or a refund claim to HMRC.

Frequently asked questions

What does my National Insurance category letter mean?

Your NI category letter tells your employer's payroll software which National Insurance rates to apply to your pay. Letter A is standard for most employees — it means you pay 8% on earnings between the Primary Threshold and Upper Earnings Limit, then 2% above that, and your employer pays 15% above the Secondary Threshold with no relief. Other letters apply reduced or zero employee/employer rates for specific groups, such as under-21s (M) or apprentices under 25 (H).

What is NI category letter A?

Category A is the default letter — it applies to "all employees apart from those in groups B, C, H, J, M, V and Z" (gov.uk's wording). If none of the special circumstances below apply to you, you should be on category A.

What does NI category X mean?

Category X is used for employees who don't have to pay National Insurance at all — most commonly because they're under 16. Neither the employee nor the employer pays any Class 1 NI on an X-category employee's earnings, unlike category C (over State Pension age), where the employer still pays standard employer NI even though the employee doesn't.

Why is my NI category letter wrong on my payslip?

The most common causes: your date of birth wasn't updated when you turned 21 (should move from M to A), your apprenticeship end date wasn't flagged (H should move to A), you reached State Pension age but HMRC/payroll still has you on A instead of C, or a veteran's first-civilian-job status (V) was never applied. Check your date of birth, employment start date, and any relevant certificates are correct in your employer's payroll system, then ask HR/payroll to correct it — a wrong category letter usually means you or your employer have paid the wrong amount of NI and can claim it back.

Do Freeport and Investment Zone category letters change how much employee NI I pay?

No — the Freeport letters (F, I, L, S) and Investment Zone letters (N, E, D, K) only change the EMPLOYER'S National Insurance relief for employees working in a designated special tax site. On the employee side, F/N behave like standard category A, I/E behave like the reduced-rate category B, L/D behave like the deferment category J, and S/K behave like the over-State-Pension-age category C.

What is the Upper Secondary Threshold for NI category letters H, M, V and Z?

For 2026-27, the Upper Secondary Threshold (and its apprentice/veteran equivalents, AUST and VUST) is £50,270 a year (£967/week) — the same value as the standard Upper Earnings Limit. Employers pay 0% NI on categories H, M, V and Z up to this threshold, then the standard 15% rate above it.

Sources

Employer Cost Calculator

True cost of employing someone, by category letter

Employer NI Calculator

Employer NI bill and Employment Allowance

National Insurance Calculator

Class 1, 2, 3 & 4 for your situation

Related Calculators

National Insurance Rates & Thresholds Reference

Every NI class, rate and threshold in one table.

Employer NI Calculator

Per-employee employer NI cost and Employment Allowance.

Tax Code Checker

Check your tax code is correct alongside your NI category.

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