How much is National Insurance and when do you stop paying it?

How much is National Insurance and when do you stop paying it?


NATIONAL Insurance is a compulsory tax all working Brits have to pay once they earn over a certain threshold.

But a recently announced rise could mean Brits will have to pay more than they had to before for the tax bill.

Paying the tax though, entitles you to claim certain welfare benefits such as the state pension, statutory sick pay and maternity cover.

But the government is expected to announce a hike in the tax, although it will be beneficial in going towards paying for a major social care overhaul and bringing down NHS waiting lists.

What salary do you start paying National Insurance?

Unlike income tax, the amount of National Insurance you pay depends on how much you earn each month or week rather than each year.

If you are employed, you start paying National Insurance when you are 16 or older and earning more than £184 a week.

The self-employed start paying when they make profits of at least £6,475 a year.

Those earning less than these amounts do not have to pay any National Insurance.

If you earn less than £184 a week, but more than £120, your account will be credited as paying National Insurance, and you will still have access to the benefits such as a pension.

However, if you earn less than £120 a week you will be exempt from National Insurance contributions.

How much is National Insurance per month?

The amount of National Insurance you pay depends on how much you earn per week or month, and is broken down as follows (2021/22):

You pay nothing on the first £184 of weekly earnings (or first £797 of monthly earnings).

You pay 12% on weekly earnings between £184 and £967 (£797 – £4,189 of monthly earnings).

You pay 2% on weekly earnings of £967 or more (£4,189 or more of monthly earnings)

For example, if you were to earn £1,000 a month you would pay zero National Insurance on the first £797, leaving £203 left to pay at 12%.

Therefore, you would pay £24.36 that month.

However, with the expected rise, which we initially reported to be by at least 1%, that will go up.

Figures previously reported from accountancy Blick Rothenberg show how much your National Insurance contributions would go up to if the rates increased from 2% to 3% and 12% to 13%.

On earnings of £15,000 it would be £54 a year more, and on earnings of £25,000, £154 more.

National Insurance contributions on earnings of £35,000 would increase by £254 a year and on a salary of, £50,000 would go up by £404.

Can I check how much National Insurance I've paid?

You can check how much National Insurance you've paid using the Government Gateway portal. You will need a login and password to do this.

If you do not have a login to the Government Gateway portal you can set one up, but will need your National Insurance number to do so.

You can check how much you have made in contributions during the current financial year, and check how many National Insurance credits you have received.

However, this portal will not give you an estimate of how much state pension you are entitled to.

You can also request for a paper version over-viewing your contributions if you want.

Can I opt out of National Insurance?

You cannot opt out if you are employed or self-employed, are aged 16 or over and earning above the minimum threshold.

If you are employed, your contributions will automatically be deducted from your take-home pay, so opting out is not possible anyway.

However, the self-employed have to manage these payments themselves.

If you become self-employed, you must tell HMRC as soon as possible.

You will then be required to complete a Self Assessment tax return every year.

This will be used to determine how much tax and National Insurance you should pay.

When do I stop paying National Insurance?

You stop paying for National Insurance when you reach the State pension age.

Class 1 and Class 2 contributions when you reach State Pension age – even if you're still working and you'll continue paying Class 4 contributions until the end of the tax year in which you reach State Pension age.

For example, if you reach State Pension age on September 6 this year, that's when contributions will stop.

That age is currently 66, so when you reach the milestone birthday, your contributions will cease.

But there are plans for it to increase to age 67 between 2026 and 2028, and there's no reason it won't rise further beyond these dates either.

You would also stop paying National Insurance tax if your wages suddenly dropped below the threshold and you weren't earning enough to contribute anymore.

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