EMPLOYMENT
National Insurance contributions Employees For 2025/26 the rates of Class 1 employee NICs are 8% and 2%. The employer rate is 15%. The Secondary Threshold is the point at which employers become liable to pay NICs on an individual employee’s earnings and is currently set at £5,000 a year from 6 April 2025. The government announced that this will be maintained at this level until April 2031. The Employment Allowance allows eligible businesses with employer NICs bills to deduct £10,500 from their employer NICs bill. The self-employed For 2025/26 the rates of Class 4 self-employed NICs are 6% and 2%. These rates remain the same for 2026/27.
Changes for 2026/27 The government will increase the Lower Earnings Limit (LEL) and the Small Profits Threshold (SPT) from 2026/27. For those paying voluntarily, the government will also increase Class 2 and Class 3 NICs for 2026/27. The LEL will be £6,708 per annum (£129 per week) and the SPT will be £7,105 per annum. The main Class 2 rate will be £3.65 per week and the Class 3 rate will be £18.40 per week. Employer NICs relief for veterans The government will extend the employer NICs relief for employers hiring qualifying veterans to April 2028. This means that businesses continue to pay no employer NICs up to annual earnings of the Veterans Upper Secondary Threshold of £50,270 for the first year of a veteran’s employment in a civilian role. National Living Wage and National Minimum Wage The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2026. The rates which will apply are as follows:
For Class 2 NICs from 6 April 2025:
• Self-employed people with profits of £6,845 and above get access to contributory benefits, including the State Pension, through a National Insurance Credit, without paying Class 2 NICs. • Those with profits under £6,845 who pay Class 2 NICs voluntarily to get access to contributory benefits, including the State Pension, will continue to be able to do so.
NLW 18-20 16-17 Apprentices
From 1 April 2026
£12.71 £10.85 £8.00
£8.00
Employment
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