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.
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