National Insurance: the other deduction

Lesson 6 of 16 in our free Work, Payslips & Tax guide: a 5-minute money game with the key points below.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Work, Payslips & Tax is free for everyone.

Questions you'll answer

Annual salary £24,000. How much employee National Insurance per year?

Mo earns £1,000 a month. Roughly how much NI is taken each month?

Your State Pension → Yes, NI counts. Your NI record decides how much State Pension you get.
Some contribution-based benefits (like new-style JSA) → Yes, NI counts. These depend on your NI record.
Your student loan balance → Nope. Totally separate system. NI doesn't touch it.
Dex's 'passive income' course → Nope. No government scheme backs this. Nothing backs this.
Fact: “Your employer pays National Insurance on top of your wages.” — Employer NI is 15% on earnings above £5,000 a year. It doesn't come out of your pay.
Myth: “You need a National Insurance number to start a job.” — You can start without one if you're allowed to work — but apply ASAP so your contributions are recorded.
Fact: “NI stops being taken once you reach State Pension age.” — Employee NI stops at State Pension age, even if you keep working.