How to Calculate your National Insurance Payment Rates

National Insurance is the money paid by people of working age in Britain to gain entitlement to a number of state benefits such as unemployment benefit and the state pension. Employers normally deduct the National Insurance contributions required of their employees before paying wages, so in most circumstances, you won’t have to work it out by yourself. But it never hurts to double check!

Instructions

Difficulty: Moderately Challenging

1. Check the Revenue website to find out the latest threshold levels for income which determine how much, if any, National Insurance you should be paying (see Resources for link). These figures can change from year to year, so make sure you have the latest numbers.
2. Work out whether your weekly income is above the primary threshold level. If it’s not, you don’t have to pay any National Insurance Contributions at all. Otherwise, you are liable to make National Insurance Contributions equivalent to 11% of your income above the primary threshold level. For example, if the primary threshold level was £100, and you earned £200 per week, you would be liable to pay £11 in National Insurance Contributions per week. 11% of (£200-£100) = £11.
3. Work out whether your weekly income is above the upper earnings limit. If so, your earnings above this level will have National Insurance deducted at a rate of 1% only.
4. Decide whether you are exempt from having to pay National Insurance Contributions because of age. If you are under 16, or over the state Pension age (currently 65 for men and 60 for women, but check Revenue site for possible changes in this), you are exempt from making National Insurance Contributions.

Tips & Warnings

• If you just want to know the amount of National Insurance you will be paying and aren’t interested in how the figure is worked out, there are a number of simple web tools you can use. After you set a few simple parameters, these websites will analyse your gross annual income and break it down into the various chunks which are taken by the government, including National Insurance (see Resources). They can also be a useful way to check your own calculations if you do want to work it out by yourself.
• Married women once had the option of paying National Insurance Contributions at a reduced rate. This is no longer the case, but women who formally declared this choice to the government may still be entitled to the lower rate.