Changes to National Insurance 2021/22

Today, 6th April, marks a new tax year and with that comes new thresholds for National Insurance purposes.

We have detailed the different rates which apply depending on an individual’s situation during the 2021/22 tax year.




Employees pay Primary Class 1 National Insurance on their earnings.
On those same earnings, Employers contribute Secondary Class 1 National Insurance.


Primary Class 1 National Insurance (Employee Contributions)


Earnings less than £120 per week attract no National Insurance payments. Those between £120 – £184 per week attract a rate at 0%.
This can be confusing, because at 0% nothing is paid, however, the Government recognises that you are earning enough to be eligible for state benefits. Although you will not be liable to pay any National Insurance within this bracket, you will still earn a ‘qualifying year’ for the purpose of state benefits.


For 2021/22, the primary threshold is set at £184 per week (£797 per month; £9,568 a year) and attracts a rate of 12%. This rate continues to the upper earnings limit at which point amounts over this are payable at an additional 2%.

For 2021/22, the upper earnings limit is set at £967 per week (£4,189 per month; £50,270 per year).


Secondary Class 1 National Insurance (Employer Contributions)

Employer contributions are payable at the secondary rate of 13.8%.
It applies to employees aged 21 to 25 (not including apprentices) and is applicable to earnings above £170 per week (£737 per month; £8,840 per year) for 2021/22.


For those under 21 or an apprentice over 25 the employer’s rate of 0% applies.


For employers Class 1A and Class 1B National Insurance can come into effect when there is an employee taxable benefit or PAYE settlement agreement. Both of which are also at the rate of 13.8%



Self Employed

The self-employed pay two classes of contributions – Class 2 and Class 4 – if their profits exceed the relevant thresholds.


Class 2 contributions are payable at £3.05 per week for 2021/22 (unchanged from 2020/21). This is due if earnings are in excess of the small profits threshold which is £6,515 for 2021/22.
Where earnings are below the small profits threshold, Class 2 contributions can be paid voluntarily to maintain the earner’s contribution record for the purpose of state benefits.


Class 4 contributions are payable at the main rate of 9% on profits between the lower profits limit, set at £9,568 for 2021/22, and the upper profits limit, set at £50,270 for 2021/22.
An additional rate of 2% is due on earnings more than the upper profits threshold.



Voluntary Contributions

Individuals can make voluntary contributions of Class 3 National Insurance to maintain their contributions record. This allows access to specific state benefits such as state pension.


These are payable at a weekly rate of £15.40 for 2021/22.
Where the option is available to pay Class 2 voluntarily, this is a much cheaper option, but this is usually for those who are self-employed or living abroad.



If you would like more advice on your contribution record and your National Insurance contributions, please call us on 01482 888820.