National Insurance Contributions (NICs)


Class 1 (Employees)
Contracted into State Second Pension S2P
2004/05 2003/04
Employee Employee
  • No NICs where earnings are up to £91 a week
  • 11% NICs on £91.01 - £610 a week
  • 1% NICs over £610 a week
  • No NICs where earnings are up to £89 a week
  • 11% NICs on £89.01 - £595 a week
  • 1% NICs over £595 a week
Employer Employer
  • No NICs on the first £91 a week
  • 12.8% NICs over £91 a week
  • No NICs on the first £89 a week
  • 12.8% NICs over £89 a week
   
Earnings limit or threshold 2004/05 2003/04
  Weekly Monthly Annual Weekly Monthly Annual
£ £ £ £ £ £
Lower limit (LEL) 79 342 4,108 77 334 4,004
NICs start 91 395 4,745 89 385 4,615
Upper limit (UEL) 610 2,644 31,720 595 2,579 30,940

Contracted-out S2P rebate 2004/05 2003/04
Reduction on band earnings £79.01 - £610pw £77.01 - £595pw
Employer rate reduction
  • Salary-related scheme
 3.5% 3.5%
  • Money-purchase scheme
 1.0% 1.0%
Employee rate reduction 1.6% 1.6%

Class 1A (Employers)    
Most taxable employee benefits): 12.8% 12.8%
     
Class 2 (Self-Employed) 2004/05 2003/04
Flat rate £2.05pw £106.60pa £2pw £104pa
If earnings over £4,215pa £4,095pa

Class 4 (Self-Employed) 2004/05 2003/04
On profits £4,745 - £31,720 pa   8% £4,615 - £30,940 pa 8%
  Over £31,720pa          1% Over £30,940pa         1%

Class 3 (Voluntary) 2004/05 2003/04
Flat rate £7.15pw £371.80pa £6.95pw £361.40pa


The summary has been prepared very rapidly and may contain errors for which we cannot be held responsible. The proposals are in any event subject to amendment before the Finance Act is passed.