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For employees' NIC, see Employee Taxation.
Self-employed people pay:
- weekly Class 2 contribution of £2.50, unless they claim exception for small earnings (below £5,315).Usually
paid monthly by direct debit.
- Class 4 NIC at 9% of taxable profits between £7,225 and £42,475. Profits over £42,475 will be charged
at 2%. This is assessed and paid with the self-assessment income tax on profits.
Class 3 voluntary NIC may be paid at £12.60 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 so that the Class 1 paid on earnings can be taken into account. Class 4
will then be charged through self-assessment at only 2%, and the overall balance or liability will be settled at a later date.
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