What is National Insurance?
National Insurance is a contribution paid on earnings in the UK that funds state benefits and the State Pension. For an employee it has two parts: Class 1 contributions deducted from their pay, and employer's National Insurance paid by the employer on top. Both are worked out in payroll and paid to HMRC with PAYE.
What to know
- The amounts depend on the employee's National Insurance category letter and how much of their earnings falls in each band. Most employees are category A.
- Employer's National Insurance is a cost to the business on top of the salary, not a deduction from it.
- Employers deduct and pay National Insurance through payroll software and report it to HMRC with each payday.
- Class 1A National Insurance is due on benefits given to employees, such as company cars, and is paid separately.
Sources: GOV.UK, "National Insurance rates and categories". Checked 1 October 2026.
National Insurance and RewardsPilot
National Insurance is part of the PAYE bill. Paid through RewardsPilot, the bill earns 4 RewardsPilot points per £1 of net spend.
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Official facts are quoted from GOV.UK and can change. This is general information, not tax or legal advice. Programme facts come from the published RewardsPilot rate and the Rewards Programme Rules.