National Insurance
National Insurance category letters — what employers need to know.
National Insurance category letters control how employee and employer contributions are calculated. Choosing the wrong letter can affect deductions, employer costs and payroll compliance.
Employer guide
How NI categories affect payroll.
Each category letter tells payroll software how to calculate Class 1 employee and employer National Insurance across the correct earnings bands.
Standard employee
Most employees use Category A unless another category applies.
Reduced or deferment cases
Used where special employee contribution treatment applies, such as married women’s reduced rate or deferment situations.
State Pension age
Employees over State Pension age do not usually pay employee Class 1 NIC, although employer NIC can still apply.
Age-related employer relief
Used for apprentices under 25 or employees under 21 where employer NIC relief may apply up to the relevant threshold.
Freeport and Investment Zone
Used when employees qualify for Freeport or Investment Zone employer NIC rules.
Veterans
Used for qualifying veterans where employer NIC relief can apply for eligible employment.
2026/27 employee NI rates snapshot
| Category | £129 to £242 weekly | £242.01 to £967 weekly | Over £967 weekly |
|---|---|---|---|
| A | 0% | 8% | 2% |
| B | 0% | 1.85% | 2% |
| C | N/A | N/A | N/A |
| J | 0% | 2% | 2% |
| M / N / V | 0% | 8% | 2% |
Always check the employee’s age, pension age status, deferment position and any apprentice, veteran, Freeport or Investment Zone eligibility before choosing the category letter.
Need help choosing the right NI category?
A S Payroll Services can check your setup and keep payroll deductions aligned with current rules.