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For employees' NIC, see Employee Taxation.
Self-employed people pay:
- weekly Class 2 contribution of £2.05, unless they claim exception for small earnings (below
£4,215).
- Class 4 NIC at 8% of taxable profits between £4,745 and £31,720. Profits over
£31,720 will be charged at 1%. This is assessed and paid with the self-assessment income tax on
profits.
Class 3 voluntary NIC may be paid at £7.15 per week by someone who is not in work but who wishes
to maintain state pension rights.
Annual limits
Someone who is both employed and self-employed will pay Class 1, Class 2 and Class 4 NIC. It is possible
to apply for deferment of Class 4, and sometimes Class 2 as well, so that the Class 1 paid on earnings
can be taken into account. Class 4 will then be charged at only 1%, and the overall liability will be
settled at a later date.
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