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.

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 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 employees who work in freeports

Employers use category letters F, I, L and S for employees who work in a freeport.

Category letter Employee group
F All employees who work in freeports, apart from those in groups I, L, and S in this table
I Married women and widows who work in freeports and are entitled to pay reduced National Insurance
L Employees who work in freeports and can defer National Insurance because they’re already paying it in another job
S Employees who work in freeports and are over the State Pension age

Category letters for employees who work in investment zones 

Employers use category letters N, E, D and K for employees who work in an investment zone.

Category letter Employee group
N All employees who work in investment zones, apart from those in groups E, D and K in this table
E Married women and widows who work in investment zones and are entitled to pay reduced National Insurance
D Employees who work in investment zones and can defer National Insurance because they’re already paying it in another job
K Employees who work in investment zones and are over State Pension age

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.

View a printable version of the whole guide

Part of Get your business ready to employ staff: step by step

  1. Step 1 Decide what type of employee you need

    1. Check whether you need full time or part time staff
    2. Check the different types of employment status

  2. and Check you can afford to take on employees

    1. Check how much the National Minimum Wage is
    2. Find out how much National Insurance you need to pay for your employees
    3. Check how much sick pay your employees are eligible for
    4. Check how much you need to pay towards your employee's pension
    5. Check how much Maternity Leave you need to pay your employees
    6. Check how much Paternity Leave you need to pay your employees

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

    1. Prevent discrimination
    2. Make your workplace accessible for employees with disabilities or health conditions
    3. Keep employee information and data safe
    4. Fire safety
    5. Health and safety

    You also need to make checks when you recruit and employ someone.

    1. Find out what you need to check when you employ someone

  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

    1. Understand your pension responsibilities as an employer

  6. Step 5 Get Employers' Liability insurance

    1. Find out about Employers' Liability insurance

  7. Step 6 Recruit and employ staff

    1. Employ someone