The 'other tax' nobody explains. See your NI, income tax, and what your employer really pays.
Employees pay 8% on earnings between £12,570 and £50,270 (Class 1), and 2% above £50,270. This was reduced from 10%/2% in January 2024. Self-employed pay 6% Class 4 NI on profits between £12,570-£50,270.
From April 2025, the employer NI secondary threshold drops from £9,100 to £5,000, and the employer NI rate increases from 13.8% to 15%. This significantly increases the cost of employment, especially for lower-wage workers.
Yes, you need 35 qualifying years of NI contributions to receive the full new State Pension (£221.20/week in 2024-25). You need at least 10 years for any State Pension at all. Check your NI record on GOV.UK.
Self-employed people pay: Class 2 NI (£3.45/week, waived for most from Apr 2024) which counts toward State Pension, and Class 4 NI (6% on profits £12,570-£50,270, 2% above). Class 4 doesn't count toward benefits.
If you've overpaid NI (e.g., from multiple jobs), you can claim a refund from HMRC. If you're earning below the Primary Threshold but above the Lower Earnings Limit (£6,396), you build NI credits without paying NI.
Salary sacrifice reduces your gross pay (and therefore your NI liability) in exchange for pension contributions or other benefits. Both you AND your employer save NI. On a £5,000 sacrifice, you save £400 in NI and your employer saves £690.