Salary FYI

NIC (National Insurance Contributions)

Tax

A UK payroll tax paid by employees and employers that funds the state pension, NHS, and other social security benefits.

## NIC (National Insurance Contributions)

National Insurance is the UK's social security tax. It funds the state pension, statutory sick pay, maternity benefits, and the NHS.

### Employee Rates (2025/26)

| Class | Rate | Threshold |
|-------|------|-----------|
| Class 1 (employee) | 8% | £12,570–£50,270 |
| Class 1 (above UEL) | 2% | Above £50,270 |
| Employer | 13.8% | Above £9,100 |

### Class 2 and Class 4 (Self-Employed)

Self-employed individuals pay Class 2 (flat rate, £3.45/week) and Class 4 (6% on profits between £12,570–£50,270, 2% above).

### NICs and State Pension

NIC payments build entitlement to the State Pension. A full new State Pension requires 35 qualifying years. NIC records can be checked at gov.uk.

### Comparison

NICs are the UK equivalent of US FICA taxes, French cotisations sociales, and German Sozialversicherungsbeiträge. The combined employee-employer burden in the UK is lower than France or Germany but higher than the US.