DMBM525020 - Debt and return pursuit: NIC: general: introduction

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National Insurance Contributions are divided into classes:

• Class 1 payable by employers (secondary class 1 contributions) and employees (primary class 1 contributions) on earnings from employment and usually collected alongside PAYE.
• Class 1A payable only by employers and some third parties on most taxable benefits provided in kind to employees.
• Class 1B payable by employers, as part of PAYE Settlement Agreement (PSA) agreed with HMRC.
• Class 2 a flat rate contribution payable by the self-employed.
• Class 3 a voluntary contribution to preserve or enhance entitlement to certain benefits, such as the basic State Pension.
• Class 4 payable by the self-employed and based on a percentage of profits between a lower and upper limit, normally in addition to Class 2 contributions.