Advent Day 23 – What are the four types of National Insurance

Class 1 National Insurance Contributions:

Paid by employees earning above a certain threshold and their employers.Contributions are based on earnings, and different rates apply to different income levels.This class covers most employed individuals.

Class 2 National Insurance Contributions:

Paid by self-employed individuals and certain groups who may not pay Class 1 contributions.The rate is a fixed weekly amount, which is subject to specific criteria.

Class 3 National Insurance Contributions:

Voluntary contributions that individuals can make to fill gaps in their National Insurance record, often to maintain eligibility for certain benefits, such as the state pension.These contributions are usually paid by people who are not required to pay Class 1 or Class 2 contributions.

Class 4 National Insurance Contributions:

Paid by self-employed individuals on their profits above a certain threshold.This class is based on the level of profits, not on the total income.#nationalinsurance #taxtips