I am liable to pay Class 1 NI contributions. How much will it cost me?

Class 1 contributions are earnings related, so the more you earn the more you pay.

You have to pay Class 1 contributions on each job in which your earning exceed the threshold (see below).

If you earn below the Lower Earning Limit (LEL), you do not have to pay contributions.

If you earn above the LEL but below the Primary Threshold (PT), you do not have to pay contribution but will have contributions credited to you to protect your entitlement to benefits.

If you earn above the PT, you will have to pay NI contributions on all your earnings up to the Upper Earnings Limit (UEL).

From 2003/04 on, earnings above the UEL are also liable to Class 1 contributions, although there is a different percentage rate to earnings below the UEL.

You can find the current NI rates and limits.

Other payments

If you are paid at irregular intervals (for example, you get a lump sum at the end of a voyage), you will have to pay contributions based on the number of weeks the voyage lasts. This includes all periods of paid leave at the end of the voyage.

Payments of bonuses, commission, allowances, late payments, leave pay may not be included in your general wages at the end of the pay period but you will be liable to pay contributions on these as well.