An employee’s payslip will usually show two deductions on the right-hand side: one called tax and one called National Insurance, employee NI, NIC, or simply NI. The tax is Income Tax, often called PAYE tax because it is deducted through payroll. PAYE stands for Pay As You Earn — a rare example of payroll terminology doing what it says on the tin.

Thresholds and Rates - April 2025/26

It was announced in the budget today that from April the employer’s National Insurance contributions will be increased from 13.8% to 15%.  It was also announced that the secondary threshold is reducing from £9100 per year to £5000.

There are several new National Insurance categories to be introduced from this April, most are related to the new freeports but there is also one for qualifying veterans. All of the new categories carry relief for employer’s National Insurance contributions.

National Insurance for Directors is classed differently from that of employees. There are two methods which can be used for Directors National Insurance namely Cumulative (or Directors) and Table Method (or alternative).