Students: What is NIC, how much is it and where to get further information

You pay National Insurance contributions (NICs) to build up your entitlement to a State Pension and other Social Security benefits. You pay NICs in addition to tax.

We keep both your tax records and your National Insurance records under your National Insurance number, so it would be helpful for you to have it handy when you contact us. Your National Insurance number looks like:

JX 34 25 16 B

You will pay NICs if you are:

16 and over and
working in the UK.

There are different classes of NICs. Which of these you pay depends on your work situation.

If you have a job

If you have a job you may have to pay Class 1 NICs. The amount you pay is worked out as follows:

• nothing on pay up to £105 a week (£453 a month)
• 11per cent on pay between £105.01 and £770 a week (£453.01 and £3337 a month)
• 1 per cent on pay over £770 a week (£3337 a month)

Your employer takes NICs from your pay before you get it.

If you work for yourself
If you work for yourself you may have to pay:

Class 2 NICs, and
Class 4 NICs.

Class 2 NICs are £2 a week and are compulsory unless your income is going to be low - in which case you can apply for Small Earnings Exception (PDF 951K).

Class 4 NICs are worked out on your annual profit and you pay them with your annual tax bill.

If you do not work
If you do not work you can pay Class 3 NICs (PDF 164K) voluntarily if you want to protect your right to a state pension.

For more information take a look at the HM Revenue & Customs NICs.