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National Insurance rates and categories

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Category letters

Employers use an employee’s National Insurance category letter when they run payroll to work out how much they both need to contribute.

Most employees have category letter A. Employees can find their category letter on their payslip.

There are different category letters for eligible employees who work in a special tax site within a Freeport or Investment Zone.

Category letter Employee group
A All employees apart from those in groups B, C, H, J, M, V and Z in this table
B Married women and widows who have a certificate of election form showing they’re entitled to pay reduced National Insurance
C Employees over the State Pension age
H Apprentices under 25
J Employees who can defer National Insurance because they’re already paying it in another job
M Employees under 21
V Employees who are working in their first job since leaving the armed forces (veterans)
Z Employees under 21 who can defer National Insurance because they’re already paying it in another job

Category letters for eligible employees who work in a special tax site within a Freeport

Employers use these category letters for eligible employees who work in a special tax site within a Freeport. Employees who work in a Freeport but not within a special tax site should have a different category letter.

Category letter Employee group
F All employees who work in a special tax site within a Freeport, apart from those in groups I, L, and S in this table
I Married women and widows working in a special tax site within a Freeport who have a certificate of election form showing they’re entitled to pay reduced National Insurance
L Employees who work in a special tax site within a Freeport and can defer National Insurance because they’re already paying it in another job
S Employees who work in a special tax site within a Freeport and are over the State Pension age

If you’re an employer you can check if you can use one of these category letters when you claim National Insurance relief for employees working in a special tax site within a Freeport.

Category letters for eligible employees who work in a special tax site within an Investment Zone

Employers use these category letters for eligible employees who work in a special tax site within an Investment Zone. Employees who work in an Investment Zone but not within a special tax site should have a different category letter.

Category letter Employee group
N All employees who work in a special tax site within an Investment Zone, apart from those in groups E, D and K in this table
E Married women and widows working in a special tax site within an Investment Zone who have a certificate of election form showing they’re entitled to pay reduced National Insurance
D Employees who work in a special tax site within an Investment Zone and can defer National Insurance because they’re already paying it in another job
K Employees who work in a special tax site within an Investment Zone and are over State Pension age

If you’re an employer you can check if you can use one of these category letters when you claim National Insurance relief for employees working in a special tax site within an Investment Zone.

Category letter X

Employers use category letter X for employees who do not have to pay National Insurance, for example because they’re under 16.

Mariners and deep sea fishermen

HMRC has detailed information on National Insurance for mariners and deep sea fishermen.

  1. Step 1 Check that you’re taking on someone as an employee

    Follow these steps if you want to take on someone with the employment status of ‘employee’ for the first time.

    1. Check who counts as an employee

    The rules are different if you want to take on someone with another type of employment status, such as agency staff, freelancers, consultants and contractors.

    1. Check your responsibilities when you take on someone with a different employment status and contract type
  2. and Check you can afford to take on employees

  3. Step 2 Make your workplace safe and accessible for employees

  4. Step 3 Register as an employer and set up PAYE

    You need to register with HMRC so you can pay tax and national insurance for your employees.

    1. Register as an employer and set up PAYE
    2. Choose how to run payroll
    3. If you decide to run payroll yourself, choose payroll software
  5. Step 4 Check your responsibilities around workplace pensions

  6. Step 5 Get Employers' Liability insurance

  7. Step 6 Recruit and employ someone