How Do I work Out How Much NI To Pay

There are very few people who actually enjoying paying tax and National Insurance. Most of us accept though that it’s just one of those things, and know that money deducted from our wages goes to fund things like pensions, and social security benefits for people who are working or on a low income. But how do you calculate how much National Insurance you should be paying?



If you work for an employer, the good news is that you don’t need to understand the ins and outs of calculating and paying National Insurance – your employer’s payroll department will do it all for you. They will have software which applies the latest rates from HMRC and sends the money electronically to the government. Your payslip which is issued at the end of the month or week will show what has been deducted.


If you’re self-employed, things get a little more complicated. All people who run their own business or work for themselves have to keep track of what they are earning in order to complete a self-assessment form for tax every year. Part of this calculation is working out how much National Insurance you are due to pay, depending in part on your profits. You can use an online calculator to help estimate how much tax and National Insurance you’ll have to pay in order to keep back funds in a savings account for when the bill is generated. Accountants are also happy to help self-employed people with record keeping and completing tax returns.


Not every worker or self-employed person will pay National Insurance as people who work part time or have low earnings may be under the threshold. The limits at which you start paying National Insurance usually change at the start of the tax year every April. If you’re employed, you have to earn £155 each week before you start paying National Insurance. Someone earning minimum wage of £7.20 per hour and working 16 hours per week would therefore pay nothing. People on higher salaries pay more. Self-employed people have to made a certain level of profits over the course of the year. People who make a profit of less than £6,025 per year don’t pay any National Insurance as a self-employed person.

Things to Remember

  • Not everyone pays National Insurance – it depends on how much you earn.
  • If you’re employed, your employer will take care of deductions for you.
  • Self-employed people pay National Insurance too, in one lump sum at the end of the year.
  • Any problems or questions about paying NI should be referred to the HMRC helpline.


What is a National Insurance Number and Why Do I Need One?


Take a look at your last payslip from your employer. How much attention do you pay to the details which are shown on it? If you’re anything like most of us, your eye just skips immediately to the bottom right hand corner, where your nett salary is listed. In among the other numbers and figures on your payslip will be your National Insurance number, and it’s important to understand what this is, and what it’s used for.

Finding The Number

Your NI number is shown on your payslip because you’ve told your employer what it is as some point in the past. If you ever forget your NI number, take a look at old payslips to find it. NI numbers always follow the same format of AA 11 22 33 B. The numbers are allocated centrally and the only meaning behind the letters is for HMRC internal systems. You can’t choose your own number, and once allocated to you, it never changes.

Why Do I Need a NI number?

Everyone who wants to work in the UK needs a NI number. Think of it as your personal account reference number with the tax authorities. Using your name might not identify you as an individual; there may be several other people working in the UK with the same name. There may even be another John M Smith or Karen G Jones born on the same day as you. Your NI number is unique and never changes, even if you move job, home or change your name. It’s the simplest way of making sure your tax records are correct and don’t get mixed up with someone else’s. Most people who grew up in the UK will have their NI number sent to them automatically, but others may have to go through an application process.

Getting Paid

Having a National Insurance number doesn’t automatically mean you’ll be taxed; it’s more complicated than that. You won’t pay any National Insurance until you earn over a certain amount a week, currently £155 per week. If you’re working part time and don’t earn that much every week, you still need a NI number, but won’t have any National Insurance deducted from your salary. As you earn more, you’ll pay more in National Insurance, and your employer will contribute too. The money we pay in National Insurance goes towards paying for pensions, or other social security benefits which you might be able to claim if you’re out of work.


The other situation in which your NI number comes into play is when you are dealing with the Benefits department of the government. Just as with the tax authorities, the Department of Work and Pensions uses your NI number to identify you and stop you getting mixed up with other people with similar details. You’ll have to give your NI number if you have a baby and start to claim Child Benefit or tax credits, or if you stop working and have to claim Job Seeker’s Allowance to tide you over while you look for another job.


What To Say In an Interview (And What Not To Say)


Going for an interview is stressful, especially when it’s for a job you really want. Everyone reacts differently under pressure, and one of the most common problems in an interview is for your mouth to run away with you and for you to say the wrong thing. Here’s some of the most common errors, and how to avoid making the same mistakes.

Be pleasant and friendly to everyone

It’s a fairly common tactic for reception staff to observe candidates sitting in reception to listen to conversations and see how they are behaving. Keep any conversation professional and friendly; don’t swear or complain loudly about a train journey but instead keep it simple and polite. If in doubt, talk about the weather. Chat to the receptionist if they chat to you first, but interrupt them to chat if they are busy.

Why did you leave your last job?

This is one of the most common questions in interview. If you’re unhappy in your current position it can be tempting to launch into a long tirade about how you hate your boss and how your colleagues are idiots, but this isn’t going to impress. Think about what the new role offers which you can’t get from your current job such as more responsibility, a different location, flexible working or the chance to learn new skills. Always give a positive reason for wanting to move on rather than negative ones.

Keep it Relevant

Many employers use very structured interviews where all candidates are asked exactly the same questions and then scored on their response. Always listen very carefully to what you are being asked and make sure you answer the question in full. Don’t get sidetracked or tell long stories which are not relevant to your point. If asked about previous situations or experience, use recent examples where possible.

Strengths and Weaknesses

The one question which most candidates struggle with is about strengths and weaknesses. It’s easy to think of what we’re good at, and easy to show that you have good leadership or teamworking skills. It’s not so easy to think about our weaknesses, and it’s tempting to trot out clichés about being a perfectionist. It’s often easier to concentrate on a weakness which is quantifiable – for example saying that you’d like to improve skills using a specific software package, or would like more experience recruiting staff or training new people.

Be On Your Guard

Some employers like to try to put recruits on the spot by asking them to tell a joke or solve a puzzle to see how they react under pressure and whether or not they can think on their feet. Have a clean, non-offensive joke up your sleeve to use if asked. Research the company on the internet to see if this is a technique they’ve used in the past. If you’re asked a question which you don’t know or can’t answer then say so – they will appreciate your honesty and you won’t dig yourself a bigger hole by trying to blunder through.


Turning 16 and Looking for Work?


If you’re a young person who is desperate to earn their own money, or are the parent of one, taking your first steps into the world of work can be exciting and daunting in equal parts. As a young worker there are certain rules and regulations which apply to you which may not concern other workers, so it’s important to know where you stand.

Minimum Wage

The first issue which you’ll come up against as a 16 year old worker is minimum wage. If you’re under 18 and not on an official apprenticeship programme, the current rate for minimum wage is £4.05 per hour. This rate goes up again when you reach your 18th, 21st and 25th birthday. Employers are not allowed to get away with paying anyone less than the minimum wage, although some may choose to pay you a bit more. If you are undertaking an Apprenticeship which combines training with work, different rates apply. Current minimum wage rates for an apprentice is £3.50 per hour. Minimum wage rates change annually, and full details of current rates are on the government websites.

Restrictions of Types of Work

If you’re under 18, there are other restrictions on the sort of work you’re allowed to do, and on the hours you can work. Young workers are not allowed to work with dangerous chemicals or in very hot or cold environments, for example. Under 18s cannot be employed in a factory, or on a building site. Nobody under the age of 18 should work more than eight hours a day, and with only a very few exceptions young people should not work between 10pm and 6am. Younger workers are also entitled to more breaks than older workers, usually a 30 minute break when you work for more than 4.5 hours. Most employers will have policies regarding employing young workers, and it’s worth reading them through to understand your rights and responsibilities when at work.


Young people starting work will have to go through the same process as any other worker, irrespective of age. Employers are legally obliged to make sure that their workers have the legal right to live and work in the UK. Workers will be asked for their passport, or some other way of proving your nationality. You’ll also probably need a bank account, as there are very few employers giving wages by cash or cheque any more. 16 year olds can open a basic bank account to have wages paid into, but will not be allowed to have any credit such as an overdraft until they reach the age of 18. The other item needed is a National Insurance number which is used by HMRC to calculate tax and other deductions from your salary. If you’ve always lived in the UK you’ll receive notification of your number just before your 16th birthday, but if you were born elsewhere, or have only recently arrived, you will have to go through the application process to have a National Insurance number allocated to you.