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Class 1 NIC thresholds 2018/19

Lower Earnings Limit (LEL) £116 £503 £6,032
Primary Threshold (PT) 162 702 8,424
Secondary Threshold (ST) 162 702 8,424
Upper Secondary Threshold (UST) 892 3,863 46,350
Upper Earnings Limit (UEL) 892 3,863 46,350


  1. No NIC are payable by employee or employer on earnings up to the PT (employees) or ST (employer).
  2. No employee NIC are payable once the employee reaches state retirement age, but employer NIC continue to be payable.
  3. No employer NIC are payable on earnings up to the UST for employees aged under 21, or apprentices aged under 25, at the date of the payment.
  4. No employee NIC are payable on earnings between the LEL and the PT, but when reported by the employer, the employee receives credit towards the State Pension.

Class 1 NIC rates 2018/19

PT/ST to UEL/UST 12% 13.8%
Above the UEL/UST 2% 13.8%


  1. Employers and employees both contribute at rates dependent on the level of earnings during a weekly, monthly or annual earnings period.
  2. A person with more than one employment can defer the payment of some employee NIC until after the end of the tax year. The total amount payable is then checked and limited, so the full 12% rate is only applied to income between the PT and the UEL.
  3. An 'employment allowance' of £3,000 per qualifying business gives exemption from Class 1 Employer NIC. Some businesses are excluded, including certain sole director companies. Employee NIC are unaffected.

Class 2 NIC

Rates per week2018/192017/18
Flat rate £2.95 £2.85
Small Profits Threshold (SPT) 6,205 6,025


Self employed people pay Class 2 NIC if their profits exceed the SPT for the tax year.

Class 3 NIC

Rates per week2018/192017/18
Class 3 flat rate £14.65 £14.25


Anyone who wants to maintain State Pension rights may pay voluntary Class 3 NIC.

Class 4 NIC

Lower profits limit (LPL) £8,424 £8,164
Upper profits limit (UPL) 46,350 45,000
LPL to UPL 9.0% 9.0%
Above UPL 2.0% 2.0%


  1. Class 4 NIC are payable on profits from UK trades or professions that exceed the lower profits limit and are chargeable to Income Tax.
  2. Both Class 2 and Class 4 NIC are collected through self assessment.
  3. An individual who is both employed and self employed may pay Class 1, Class 2 and Class 4 NIC, subject to the maximum limit for the year.
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Directors:  Paul Cutter FCA | Kate Jones FCCA, ACA | Dave Hazlehurst FCCA, CTA

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3 Lyttleton Court | Birmingham Street | Halesowen | West Midlands | B63 3HN

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