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National Insurance Contributions — Thresholds

Class 1 — Employee and employer

2020/21 2019/20
Earnings Weekly Monthly Annual Weekly Monthly Annual
Lower Earnings Limit (LEL) £120 £520 £6,240 £118 £512 £6,136
Earnings Threshold(ET)
- Primary Threshold (PT) £183 £792 £9,500 £166 £719 £8,632
- Secondary Threshold (ST) £169 £732 £8,788 £166 £719 £8,632
Upper Secondary Threshold (UST) £962 £4,167 £50,000 £962 £4,167 £50,000
Apprentice Upper Secondary Threshold (AUST) £962 £4,167 £50,000 £962 £4,167 £50,000
Upper Earnings Limit (UEL) £962 £4,167 £50,000 £962 £4,167 £50,000
Employment allowance 1 £4,000 £3,000
Apprenticeship levy 2 £15,000 £15,000
  1. The annual employment allowance may be offset against an employer’s Class 1 NICs but must be claimed via the normal payroll process. The allowance is not available to companies of which a director is the sole employee, nor to those employers whose NIC liability in the tax year before the year of a claim was greater than £100,000.
  2. The apprenticeship levy is set at a rate of 0.5% of an employer’s annual pay bill and is collected via PAYE. As the annual allowance is used to offset the payment of the levy, the levy is only paid by employers whose pay bills exceed £3 million per year.

Class 2 and Class 4 — Self employed

Income or profits 2020/21 2019/20
Annual Annual
Class 2
- Small Profits Threshold (SPT) £6,475 £6,365
Class 4
- Small Profits Threshold (SPT) £6,475 £6,365
- Lower Profits Limit (LPL) £9,500 £8,632
- Upper Profits Limit (UPL) £50,000 £50,000

Other classes

Class 1A NICs are paid on amounts reported on Form P11D(b).

Class 1B NICs are paid on earnings included in a PAYE Settlement Agreement and income tax thereon.

Class 3 NICs are paid voluntarily by persons not liable for contributions, or who are excepted from Class 2 NICs or whose contributions are insufficient to qualify for benefits.