There are three tax 'types' payable on salary…
National Insurance Contributions for Self-employed individuals that pay the following:
- Class 2 NIC on earnings more than £6,025 per year – this is a fixed amount of £2.85 p/w; plus
- Class 4 NIC at 9% on profits between £8,164 and £45,000 p/y; plus
- Class 4 NIC at 2% on any profits above this.
Salaried employees pay the following:
- Primary Class 1 NIC: 12% of earnings between £157 and £866 p/w; plus
- Primary Class 1 NIC: 2% on any earnings over £866 p/w; plus
Employers (your limited company or LLP) pay the following:
- Secondary Class 1 NIC: 13.8% on earnings over £157 p/w; plus
- Class 1A rate on employer provided benefits
Figures are correct for the 17/18 tax year. For the most up-to-date thresholds, see the HMRC’s website.