Employee NIC Calculator
Use the calculator to estimate how much your employer will deduct from your gross pay and pay towards NIC for the tax year.
Take home after tax
| Yearly | Monthly | Weekly | Daily | |
|---|---|---|---|---|
| Salary | £0.00 | £0.00 | £0.00 | £0.00 |
| Primary Treshold | £0.00 | £0.00 | £0.00 | £0.00 |
| Secondary Treshold | £0.00 | £0.00 | £0.00 | £0.00 |
| Upper Earnings Limit | £0.00 | £0.00 | £0.00 | £0.00 |
| Net Liability | £0.00 | £0.00 | £0.00 | £0.00 |
| Take-home | £0.00 | £0.00 | £0.00 | £0.00 |
Enter your annual income. Exclude expenses and VAT.
Specify tax year.
For easy comparison, the calculator automatically generates your estimated take-home income for both options simultaneously.
The calculation is based on the assumption that you are entitled to claim a personal allowance and earn a tax-efficient salary.
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Employee NIC Calculator
Who is an employee?
HMRC definition of an employee is someone who works under an employment contract.
A person may be an employee in employment law but have a different status for tax purposes. It is the responsibility of an employer to determine each worker's position in both the employment law and the tax law.
What are National insurance contributions?
National Insurance is a government scheme that requires UK residents and workers to make regular payments toward it.
Employees and businesses pay National Insurance Contributions (NICs) to fund the NHS and government benefits schemes such as state pensions.
The type of NIC you pay is determined by your employment status, income, or whether or not there are any gaps in your National Insurance coverage. For the tax year 2022-23:
You have to pay National Insurance if you are over 16 years old and either an employee earning more than £9,880 per year until 5 July 2022 and £12,570 after that (2021-22: £9,568); or self-employed and generate a profit of £6,725 (2021-22: £6,515) or more per year.
What are employee National Insurance contributions?
Employee NI contributions are deducted as taxation from each payslip at a percentage rate. It could also include some employee costs and benefits paid by your company. Their income determines the amount deducted from a person's wages.
How to calculate NIC for employees
It can be challenging to understand how NICs operate, especially if you're new to the employment market. Understanding how it works will help you with the budget and determine whether you have paid the correct amount.
The best part is that you will require none of these computations or calculations. Your employer will do these calculations, deduct the amount from your gross salary, and pay it to the HMRC.
You must pay National Insurance whether you are working or self-employed. You are only exempt from paying NI under certain conditions.
What types of earnings are subject to NICs?
Unlike income tax, NI is not charged on savings, property or pension income.
You usually pay NIC on your salary, bonus, and some benefits in kind.
Individuals aged 16 and above should pay National Insurance contributions on their earnings. People over the state pension age do not have to pay an employee or self-employed NICs, although employer NICs are still necessary for their wages.
Employment earnings and benefits, as well as gains from self-employment, are taxable.
Employees NIC contributions
Three of the six categories of National Insurance contributions are paid by employees. They are as follows:
If you are working for a company, you must pay Class 1 National Insurance Contributions, deducted automatically through PAYE. Class 1 contributions are based on gross earnings exceeding the threshold for the year.
These are voluntary payments paid by individuals who do not make enough earned or self-employed contributions to retain their state pension entitlement. They can also be reimbursed by unemployed people or individuals who work in another country.
A new type of voluntary contribution was introduced in October 2015. This one-time lump sum payment helps people who reached the pension age on or before 6 April 2016 transition to the new single-tier state pension.
Company directors are regarded as employees and must pay National Insurance on earnings over a certain amount from salaries and bonuses. Instead of pay period earnings, contributions are determined based on annual income.
Should you pay National Insurance for any in-kind benefits?
Employees usually do not pay Class 1 NIC on taxable benefits and expenses, though there are exceptions.
While you may be required to pay income tax on any benefit, you are exempt from paying Class 1 NIC on the cash equivalent of your employer's low-interest or interest-free loan (a 'beneficial loan').
Your employer may be legally required to pay Class 1A NIC on the taxable benefit if the loan is beneficial. If your employer waives the loan, they will deduct Class 1 NIC and income tax from your other wages through payroll.
On GOV.UK's A to Z list of expenses and benefits, you may search up the tax and NIC treatment of any benefits your firm offers you. Although it is aimed at businesses, it will also help employees.
How can I register for a National Insurance number?
Every UK citizen will receive their National Insurance number at the age of 16. An employee's number will be written on all payslips, P45s, and P60s they get.
If you lose your NI number, you can seek a replacement on the gov.uk website. It should appear within 15 working days of your application being completed.
You can apply for an NI number if you live in the UK and have the legal right to work. It is entirely free to apply for a National Insurance number.
If you are a non-citizen, you can start working in the UK by proving your work eligibility.
What happens if I work multiple jobs?
You may be required to pay National Insurance contributions (NICs) on your second income and pay taxes. As opposed to income tax, national insurance works differently. Each individual has a single tax-free sum available each year. As long as the work is with a different employer, each job has its own National Insurance limit. The weekly limit (2021/22) is £184.
And unless you're a corporate director, each job you hold for NIC purposes usually is examined separately. It signifies that each employee has reached the lower threshold, yet you can still pay National Insurance Contributions on each work.
Tell your supervisor if you're not sure whether your jobs are related. You can ask to defer payment of National Insurance Contribution in the other job if you have two positions in the 2021/22 tax year and plan to pay Class 1 National Insurance on a weekly income of at least £967 in one of them for the entire tax year. In one of the jobs, you must expect to pay Class 1 NIC at least £4,189 in monthly wages during the tax year.
You can fill out form CA72A to seek a Class 1 NIC delay. If you require advice notes, you can obtain them from the GOV.UK page.
What if I am employed and self-employed at the same time?
If you are employed and self-employed, you must pay the following:
Class 1 NIC on your employed earnings; and
Class 4 and Class 2 NIC on your self-employed earnings.
HMRC will collect your Class 1 NIC every payday period, but they will not collect your Class 2 NIC until 31 January following the end of the tax year. In your payments on account and balancing payment, you pay your Class 4 NIC along with your income tax due.
There is an annual maximum of contributions payable when someone is both employed and self-employed. As a result, if you have paid enough Class 1 NICs, you may not need to pay full Class 2/Class 4 NICs.
HMRC will automatically compute Class 2 and Class 4 NIC amounts when you submit your Self Assessment tax return, considering the overall maximum amounts due.
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