Budget Report 2017-18

5

Spring Budget 2017

National insurance contributions (NICs) 2017/18 Employee

Employer

(primary)

(secondary)

Class 1 Payable on weekly earnings of: Below £113 (lower earnings limit) £113 - £157 (primary threshold) Up to £157 (secondary threshold)

Nil

– –

*0%

– –

Nil

Above £157

13.8%

£157.01 - £866 (upper earnings limit)

**12%

£157.01 - £866 (under 21s and apprentices under 25)

0%

Above £866 – *No NICs are actually payable but notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement. **Over State Pension age, the employee contribution is generally nil. Employment Allowance up to £3,000 (per year) **2%

On relevant benefits

13.8%

Class 1A

Self-employed

£2.85 per week

Class 2

Small profits threshold

£6,025 per annum

Voluntary

£14.25 per week

Class 3

Self-employed on annual profits £8,164 - £45,000

Class 4

*9%

Excess over £45,000

*2%

*Exemption applies if State Pension age was reached by 6 April 2017.

Future changes

Class 2 NICs will be abolished from April 2018. The government will legislate to increase the main rate of Class 4 NICs from 9% to 10% with effect from 6 April 2018 and from 10% to 11% with effect from 6 April 2019.

National Minimum Wage and National Living Wage As announced in the Autumn Statement 2016, the National Minimum Wage (NMW) and the National Living Wage (NLW) will increase from April 2017. The government accepted all of the Low Pay Commission’s recommendations for the NMW, and the new hourly rates are outlined below.

Apprentices*

16 and 17

18 - 20

21 - 24

25 and over

National Minimum Wage

£3.50

£4.05

£5.60

£7.05

-

National Living Wage

-

-

-

-

£7.50

*Under 19, or 19 or over and in the first year of their apprenticeship.

The government has now aligned the NMW and NLW cycles so that any future increases in rates will occur in April each year.

FOR ELECTRONIC USE ONLY

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