National Insurance contributions

Class 1 has an employee side and an employer side

Class 1 National Insurance has two main payroll elements. Primary contributions are taken from an employee's earnings when the rules require it. Secondary contributions are a separate cost paid by the employer.

That distinction matters when explaining a payslip or budgeting for a hire. The employee's deduction reduces their net pay. The employer's contribution does not. HMRC's Class 1 overview describes the two elements and when liability arises.

Use the right category for the payment

Payroll uses a National Insurance category letter and the employee's earnings in the relevant pay period. Age, apprenticeship status and other circumstances can affect the category or employer treatment.

Record the evidence for a category that is not the ordinary default, and update payroll when the underlying fact changes. This page covers Class 1 payroll contributions. It does not cover a person's National Insurance number or record, voluntary contributions, self-employed classes, or the separate Class 1A and 1B rules for benefits and settlements.

Check the live table before payroll

Rates, thresholds and category treatment can change with the tax year. Use the current GOV.UK contribution table rather than copying a percentage into a policy or checklist.

After the run, reconcile both sides: the employee amounts deducted and the employer liability added. Keeping those figures separate makes the PAYE total easier to explain and prevents the employment cost from being confused with take-home pay.