Understanding National Insurance contributions is important in understanding your personal finances and the breakdown of where your money goes each month.
You may see your National Insurance contributions listed on your monthly payslip, if you feel unsure or confused as to what this means we will explain what you need to know in this blog.
What is National Insurance?
Your National Insurance contributions will count towards the benefits and pensions system.
You must pay a certain amount of National Insurance to be eligible for these schemes.
This can include:
Who pays National Insurance?
Employers, employees and self-employed workers will pay National Insurance every month.
You will pay National Insurance if you’re 16 or over and are either:
You do not pay National Insurance, but are eligible for benefits and the State Pension, if you’re either:
How much is National Insurance?
How much and the type of National Insurance you pay will depend on your employment status and income.
You will need to make sure you are paying the right amount of tax, which is determined by your tax code if you are paid via PAYE.
How do you pay National Insurance?
Your National Insurance is paid from your salary or earnings. If you are employed, it will be taken out by your employer before you get paid. You can check your National Insurance contributions on your payslip.
If you are self-employed, you will need to make sure you arrange your contributions yourself.
You can do this through your self-assessment tax return.
When do you pay National Insurance?
You will pay National Insurance when you are working and earning above the prescribed amount. Currently, once you reach the state pension age you will not need to pay National Insurance.
If you need advice on National Insurance and tax contributions, contact us today.
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