National Insurance Contributions
Rates and limits (Table D)
The rates and thresholds for NIC were announced in the Autumn Statement. The threshold at which employees start to pay NIC increases from £7,956 to £8,060. After one year at the same level, the employer threshold is once again not quite the same as that for employees – £156pw instead of £155pw. The upper earnings limit, at which the rate for employee contributions drops from the full 12% to 2%, rises from £41,865 to £42,385; raising this threshold saves 40% tax, but collects more NIC. A £104 increase in the starting threshold means that most people will pay £12.48 less; a £520 increase in the upper limit means that those who earn above that will pay £52 more.
There were no general changes to the Employment Allowance, introduced in 2014/15, which relieves most employers from the first £2,000 of employers' NIC each year. The original rules excluded certain categories of employers from the relief – for 2015/16, it will be extended to cover care and support workers.
As announced last year, employers' NIC will also be reduced to zero from 6 April 2015 for employees aged under 21 on earnings up to £815pw. This will be extended to all apprentices a year later.