national insurance contributions


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National Insurance Contributions

Deductions from paychecks or other payments made to National Insurance in the United Kingdom. National Insurance pays for the state pension, unemployment benefits and also funds the National Health Service. Both employees and employers must make National Insurance contributions, and employers must make further contributions on certain employee benefits. They do not fund other government functions, but the government may borrow against them.

national insurance contributions

the payments made by employers and their employees to the UK government up to a specified maximum limit. National insurance contributions, together with other government budgetary receipts, are used to finance state pensions, sick pay, jobseekers allowance, etc.

There are currently (2005) four classes of national insurance contributions; Class 1 (employees/employers), Class 2 and 4 (self-employed) and Class 3 (voluntary organizations). Under the most common class, Class 1, contributions are paid by employees at the rate of 11% on weekly earnings between £89 (minimum) and £585 (maximum); employers' contributions are paid at the rate of 12.2% on weekly earnings of employees greater than £84, with no upper limit. See BUDGET (GOVERNMENT), SOCIAL SECURITY BENEFITS.

national insurance contributions

the payments made by employers and their employees to the UK government, on a two-thirds and one-thirds basis respectively up to a specified maximum limit. National insurance contributions, together with other government budgetary receipts, are used to finance state pensions, social security benefits, the JOBSEEKERS ALLOWANCE, etc. See BUDGET ( GOVERNMENT).
References in periodicals archive ?
The largest single payment went to 13 councillors in Newport who received pounds 260,000 but with employers' national insurance contributions the cost to the public purse was pounds 293,000.
Releasing the NAO's report on the National Insurance Fund, Auditor General Sir John Bourn said: ``The Inland Revenue continue to face challenges in maintaining individuals' National Insurance contribution records, upon which large amounts of the public's benefit entitlement depend.
Labour has introduced 60 new taxes on individuals and businesses since taking office in 1997 and the one per cent increase in National Insurance contributions that took effect in April this year was effectively a direct tax rise, giving a top rate of 41 per cent.
The simple fact is that 88pc of small firms are seeing their energy bills rise by up to 15pc, and they are not getting this back in national insurance contributions,'' said Roland Sherwood, the FSB Welsh policy chairman.
3 per cent in April after taking into account the effect of higher National Insurance contributions and inflation -and the drop in real income for workers in the private sector was an even larger 1.
For five years, from 1996 to 2001, a computer glitch meant that a large number of people, most on low incomes, did not receive the reminders about mak-ing up their National Insurance contributions to qualify for the minimum state pension of pounds 77.
CONTROVERSIAL increases to National Insurance contributions,designed to raise billions of pounds for the NHS,came into effect yesterday.
He is critical in tone of Nick Bourne's opposition to Gordon Brown's increase in National Insurance contributions before stressing the need ``to create jobs and encourage the growth of an enterprise culture''.
The Conservatives said the government's own figures showed businesses were facing a pounds 440million-a-year bill as the result of the decision to impose national insurance contributions - at a rate of 12.
Gordon Brown followed his tax promise by telling the Mirror there would be no huge rise in National Insurance contributions.
The proposals are part of plans to cut welfare costs and make better use of national insurance contributions.
The one per cent rise in national insurance contributions (NICs) has kicked in and the race is one to find ways of offsetting it by saving tax in other areas.

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