National Insurance
National Insurance (NI) is a tax paid by most workers and employers in the UK.
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What it means
National Insurance (NI) is a tax paid by most workers and employers in the UK. The money helps fund state benefits, including the State Pension. The amount you pay usually depends on how much you earn.
Example
If your salary increases, you'll usually pay more National Insurance through PAYE, while your employer also makes contributions.
Why it matters
Understanding National Insurance helps you understand why your take-home pay is lower than your salary.
Paying National Insurance can help you build qualifying years towards receiving the full State Pension.
Is National Insurance the same as Income Tax?
No. They're separate taxes collected in different ways and used for different purposes.