National Insurance contributions

National Insurance contributions and tax are paid automatically from your wages through the PAYE system. Your tax code will determine how much you will need to pay so its important to make sure you have the right one.

Working Out If You Need To Pay Tax And National Insurance

A part of your yearly wages is tax free, which is called a personal allowance. You can earn this amount before you have to start paying tax. In 2017 -2018 the personal allowance was set to £11,500 and is due to change to £11,850 in 2018-2019 tax year.

How Much You Need To Pay

National Insurance contributions are payable when you earn more than £157 a week or £628 a month, 12% is taxed from your earnings up to £866 a week and then drops to 2% anything after than.

For example if you earned £1000 a week you would pay nothing on the first £157 (This is tax free), 12% on £709 and 2% on the remaining £134. In total you would pay £84 in National Insurance contributions if your earnings were £1000 a week. You don’t have to work this out; it is deducted automatically from your paycheck.

Paid To Much Tax?

If you think you have paid to much tax on your paycheck you might be able to get a refund using the online HMRC form or by phoning the HMRC directly.

If you have any doubt over your tax code being incorrect contact the HMRC. You don’t want to end up paying more tax than you should have to. You can find your TAX code on your Pay-slip or by asking your employer.

State Pension And Missed Payments

From the age of 16 to State Pension age you can pay National Insurance Contributions. State pension qualification depends on the number of qualifying years you have paid National Insurance. A minimum amount is required for that year to qualify.

You can check your National Insurance Payments by creating an online government gateway account. Here you will be able to view your National Insurance Number and check if there are any gaps in your National Insurance Number Contributions.

If there are any gaps in your contributions, you are able to pay them voluntarily so all contributions are complete. A letter is normally sent from the HMRC to let you know of any gaps. The letter is not a demand for payment; it will explain how much you will need to pay to fill them up.