07: National insurance contributions

Class 1 (Employees) Not Contracted out of State Second Pension S2P
2010/11	2009/10
Employee:	Employee:
No NICs where earnings are up to £110 a week 11% NICs on £110.01-£844 a week 1% NICs over £844 a week	No NICs where earnings are up to £110 a week 11% NICs on £110.01-£844 a week 1% NICs over £844 a week
Employer:	Employer:
No NICs on the first £110 a week 12.8% NICs over £110 a week	No NICs on the first £110 a week 12.8% NICs over £110 a week

Earnings limit or threshold	2010/11			2009/10
	Weekly	Monthly	Annual	Weekly	Monthly	Annual
	£	£	£	£	£	£
Lower limit (LEL)	97	421	5,044	95	412	4,940
Earnings threshold	110	476	5,715	110	476	5,715
Upper accrual point	770	3,337	40,040	770	3,337	40,040
Upper limit (UEL)	844	3,656	43,875	844	3,656	43,875

Contracted-out S2P rebate	2010/11	2009/10
Reduction on band earnings	£97.01-£770 pw	£95.01-£770 pw
Employer rate reduction:
Salary-related scheme	3.7%	3.7%
Money-purchase scheme	1.4%	1.4%
Employee rate reduction	1.6%	1.6%
Class 1A (Employers)	2010/11	2009/10
Most taxable employee benefits	12.8%	12.8%
Class 2 (Self-Employed)	2010/11	2009/10
Flat rate	£2.40 pw £124.80 pa	£2.40 pw £124.80 pa
Small earnings exception	£5,075 pa	£5,075 pa
Class 4 (Self-Employed)	2010/11	2009/10
On profits	£5,715-£43,875 pa 8%	£5,715-£43,875 pa 8%
	Over £43,875 pa 1%	Over £43,875 pa 1%
Class 3 (Voluntary)	2010/11	2009/10
Flat rate	£12.05 pw £626.60 pa	£12.05 pw £626.60 pa

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© 22 June 2010. This summary has been prepared very rapidly and is for general information only. The proposals are in any event subject to amendment before the Finance Act is passed. It is recommended you seek competent professional advice before taking any action on the basis of the contents of this publication.Last Updated