Am I paying too much National Insurance?

What is National Insurance and who has to pay it?

You can learn more about National Insurance in our guides here and here. Find out what it is and what it is for, and then read this guide to check if you are paying too much National Insurance. Learn what to do if you are paying the wrong amount of National Insurance to amend it.

How much National Insurance should you be paying?

The amount of National Insurance that you must legally pay depends on your income and employment status. Your employer will deduct Class 1 National Insurance contributions from your wages if you are employed. This is done automatically through the PAYE scheme. If you are in self-employment, you must pay Class 2 and Class 4 contributions through Self Assessment tax returns. You can make payments towards Class 3 voluntary contributions if you have gaps in your National Insurance record that would affect your eligibility to claim benefits or the State Pension. You can check the National Insurance rates here and here.

What if you are not earning enough to pay National Insurance?

While the percentages stay the same, the thresholds may change each tax year. National Insurance applies according to how much you earn a week. If throughout the year you do not earn enough in a single week to pass the threshold, then you shouldn’t be paying National Insurance yet. However, even if you only earn over the threshold for just one or a few weeks, you may owe National Insurance for those. You can use Which’s online calculator to check if you are paying the right amount for your earnings. Compare this to the information on your payslips if you have them. You might need to look into National Insurance credits instead.

How much National Insurance should you be paying if you have more than one job?

National Insurance can be even more confusing if you have more than one job – especially if this includes self-employment on the side of your primary employment. You will pay Class 1 on income from each source of employment if your earnings are over the threshold. For any earnings from self-employment above that threshold, you should be paying Class 2 or Class 4. Class 1 contributions need to be paid every payday, while Class 2 or Class 4 will be decided after you submit your tax return at the end of the tax year. If you already paid enough in Class 1 contributions that year, then you may not need to pay much or any Class 2 or Class 4.

How can you check your National Insurance record?

Another way of seeing if you are paying enough is to check your record. You will be able to see if there are any gaps and how much it would cost for you to make up the “qualifying years” in voluntary contributions. It requires having a personal tax account. You need to have a Government Gateway ID to create one of these, which allows you to view your HMRC records online. If you still have questions about your National Insurance after viewing your statements, then contact HMRC. You need to provide your National Insurance number if you call them or write to them at:

National Insurance contributions and Employers Office 
HM Revenue and Customs 
BX9 1AN 

How can you claim a National Insurance refund?

You cannot get a refund for National Insurance contributions unless there was a mistake. For example, if you paid too much because you were paying the wrong class of contributions. If it is Class 1 then you should discuss it with your employer. You should contact HMRC with evidence if your employer is unable to refund you. This may require waiting until the end of the tax year. You have 6 years from then for refund claims if you were paying in the wrong class. The rules are different and slightly complicated for self-employment claims. You can check whether or not you can claim a National Insurance refund online. It will also tell you how to claim the refund when you are entitled to one.