How much National Insurance do I pay?

NATIONAL Insurance is a form of tax on earnings that all workers have to pay once they earn over a certain threshold.

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

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 £183 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 £183 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 (2020/21):

You pay nothing on the first £183 of weekly earnings (or first £792 of monthly earnings).

You pay 12 per cent on weekly earnings between £183 and £962 (£792 – £4,167 of monthly earnings).

You pay two per cent on weekly earnings of £962 or more (£4,167 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 £792, leaving £208 left to pay at 12 per cent.

Therefore, you would pay £24.96 that month.

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.

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