1. What is National Insurance?

National Insurance (NI) is a tax on earnings in the UK that funds state benefits including the state pension, unemployment benefit, and maternity pay. The amount you pay depends on how much you earn.

2. How Does the Calculator Work?

The calculator uses the 2025 National Insurance rates:

Where:

• £0 - £12,570: 0% (Primary Threshold)
• £12,571 - £50,270: 12%
• £50,271+: 2% (on amount above Upper Earnings Limit)

Explanation: The calculation applies different percentage rates to different portions of your salary.

3. Importance of NI Calculation

Details: Understanding your NI contributions helps with financial planning and ensures you're paying the correct amount towards your state benefits.

4. Using the Calculator

Tips: Enter your annual salary before tax. The calculator will show your estimated National Insurance contributions for the 2025 tax year.

5. Frequently Asked Questions (FAQ)

Q1: Are NI thresholds different for self-employed?
A: Yes, self-employed individuals have different NI rates and thresholds.

Q2: Do NI contributions affect my state pension?
A: Yes, you typically need 35 qualifying years of NI contributions to get the full new State Pension.

Q3: What if I have multiple jobs?
A: NI is calculated separately for each job unless you apply for deferment.

Q4: Are there NI exemptions?
A: Some people may be exempt, such as those over State Pension age or with certain types of income.

Q5: How often are NI rates updated?
A: Rates and thresholds are typically reviewed annually in the UK Budget.