Employing People

National Insurance Contributions for Employees (NIC)

An employed earner, between the ages of 16 and state pension age, must pay Class 1 contributions on gross earnings which fall between the Primary Threshold (PT) and the Upper Earnings Limit (UEL). However, NICs are treated as actually having been paid on earnings at the Lower Earnings Limit up to and including the Primary Threshold. As such, the Lower Earnings Limit is the point at which a person can start to build up entitlement to contributory benefits and the Primary Threshold is the point at which they start to pay NICs.

Payment of Class 1 contributions gives entitlement to: -

  • Incapacity Benefit.
  • Jobseeker's Allowance.
  • Maternity Allowance.
  • Retirement Pension.
  • Widowed Mothers Allowance.
  • Widows Payment.
  • Widows Pension.

What happens if I become sick - does my employer continue to deduct NICs at the same rate?

If the employee's gross pay, including any statutory or other sick pay is above the LEL, NICs are due.

What happens if I have more than one employment - do both employers have to deduct NICs at the full rate?

If a person has more than one job, both employers have to deduct contributions subject to the gross pay being above the Lower Earnings Limit. If the total employee contributions payable in the employments are likely to exceed the annual maximum contribution payable, a deferment certificate may be obtained.

If I have paid too much in NICs, how do I claim a refund?

Apply to Refunds Group Inland Revenue National Insurance Contributions Office Benton Park Road Longbenton Newcastle upon Tyne NE98 1ZZ