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How Much National Insurance Do I Pay?

by Advocko
How much national insurance do i pay?

What is National Insurance?

National Insurance is a crucial element of the welfare state through which citizens are provided various social protections. These include pensions, maternity leaves, unemployment benefits, and the National Health Service. The money collected for National Insurance cannot be spent for any other purpose by the government. It can, however, use the fund to borrow from in order to complete other projects.

The national insurance fund is supported by deducting a percentage from workers’ salaries towards it. The amount deducted from each citizen varies depending on their earnings and employment status. You may therefore wonder: how much national insurance do I pay? The following blog will provide a simplified breakdown of this question depending on all variables.

Are Income Tax and National Insurance Payments the Same?

Income Tax is a deduction from your total income which is collected by the government.

National Insurance Payments are not the same as taxes. This is because the funds collected from this system are directed towards specific social benefits and not utilized for any other administrative purpose.

Consequently, even if a higher percentage is deducted from your income for National Insurance payments, it is not the equivalent of a tax hike.

Do I Have to Pay for National Insurance?

It is mandatory for you to pay National Insurance if you are a UK citizen above the age of 16 and currently earning a wage. There is no fixed amount that all workers must pay. Instead, the amount contributed by everyone varies according to their income and employment status.

If you are an employee, employer, or self-employed citizen, you qualify to pay for National Insurance and receive state benefits in return.

How much National Insurance do I pay?


If you are earning more than £180 a week, you have to pay 12% of your earnings for National Insurance. Those who earn above £962 per week must pay 2% of their income. Employees pay for Class 1 National Insurance.


Self-employed individuals qualify for two types of National Insurance payments. For Class 2 National Insurance, you need to pay a fixed rate of £3.05 per week. This is paid if you are earning profits amounting to £6,475 or more per year.

Those earning profits of £9,501 or more annually qualify for Class 4 National Insurance. If your profits fall in the range of £9,501 and £50,000, you have to pay 9% of your earnings. However, if you are earning more than £50,000 per year, you must pay 2% of your profits.


Employers are required to pay a portion of their employee’s National Insurance.  The standard rate for employers in the 2019-2020 tax year is 13.8% of an employee’s salary.

Types of National Insurance

The government has demarcated three classes of National Insurance depending on your employment status. Each class offers a different combination of state benefits and security.

Employees qualify for Class 1, which grants them for all seven benefits the state has to offer. 

Self-employed individuals qualify for Class 2, which does not offer Additional State Pension or Contribution-based Jobseeker’s Allowance.

Class 3 National Insurance offers two of the seven state benefits, including Basic State Pension and New State Pension. It applies to those who make Voluntary Payments.

According to the Government of the UK, one can make Voluntary Payments ‘to avoid gaps’ in National Insurance credit. These ‘gaps’ refer to when people are unable to make National Insurance payments due to financial struggles or unemployment during a specific period. If such gaps exist, then individuals are not able to get the number of credits needed to avail full National Insurance benefits. Therefore, voluntary payments provide an opportunity for citizens to compensate for missing credit.

Till When Do I Have to Pay for National Insurance?

If you are employed, you can stop paying Class 1 National Insurance when you reach the State Pension Age. This age limit is determined based on your gender and date of birth; it is current subject to further review.

Class 2 National Insurance paid for by self-employed workers can also be paid until State Pension Age is reached.

Class 4 National Insurance is paid until the end of the tax year when State Pension Age is reached.

Why is National Insurance Controversial?

Questions of how National Insurance should be implemented and the role it should play are often debated amongst political parties with contrasting economic and social agendas.

In the UK, the Labour Party encourages the National Insurance policy and believes that income taxes should be reduced, so more money is available for the National Insurance fund. This, they believe, would be more beneficial in supporting low-wage workers who struggle during difficult economic times.

The Conservatives, however, believe that any increase in National Insurance expenditure will be detrimental to the UK’s economy. Furthermore, they think that the UK can barely afford the amount it currently spends on social benefits. Instead, they feel a lesser percentage of workers’ earnings should be cut. This would allow them more significant savings and greater disposable income in their pockets.

The Liberal Party, while not entirely in favour of increasing government spending on state benefits, is opposed the Conservative idea of freezing them entirely. Instead, they believe in altering the National Insurance system to fit the modern-day economy. For instance, ‘gig workers’ should be considered, and it should be acknowledged that they make up a large portion of today’s workforce. They also believe in the rearrangement of the system to ensure maximum benefit to all workers.  


Mixed opinions regarding National Insurance payments extend to the citizens of the UK as well. Individuals with low incomes and greater expenses might find such deductions inconvenient and would prefer using this as disposable income. Generally, however, paying National Insurance allows for greater quality of life for workers in the UK. Benefits such as Paid Maternity Leave encourage women to join the workforce and grant them rights in the workplace. Therefore, policies such as National Insurance do not just provide financial support, but also protect and enforce the rights of citizens across the country.

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