Class 1 National Insurance
National Insurance contributions paid by employees and employers on earnings above the Primary Threshold. Employees pay 8% on earnings between the Primary Threshold (£12,570) and Upper Earnings Limit (£50,270), and 2% above that. Employers also pay a separate employer's Class 1 NI on earnings above their own secondary threshold.
Related Terms
National Insurance
A system of compulsory contributions paid by employees, employers, and the self-employed that funds state benefits including the State Pension, Statutory Sick Pay, and Maternity Pay.
Class 2 National Insurance
A flat-rate National Insurance contribution historically paid by self-employed people to build entitlement to the State Pension and other contributory benefits.
Class 4 National Insurance
National Insurance paid by self-employed individuals on their taxable profits, calculated as part of their Self Assessment tax return.
Primary Threshold
The level of earnings above which employees start paying Class 1 National Insurance contributions, set at £12,570 per year (£242 per week) for 2025/26.
Upper Earnings Limit
The earnings level above which employees pay a lower rate of Class 1 National Insurance, currently set at £50,270 — aligned with the higher-rate income tax threshold.
NI Number
A unique personal reference number issued to UK residents to track their National Insurance record, in the format two letters, six digits, one letter (e.
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