The detailed NIC rates, earnings limits and thresholds proposed for 2004/05 are set out below. The thresholds have been increased but the rates of Class 1 and 4 contributions have been held at their 2003/04 level.
| National insurance rates |
2004/05 |
2003/04 |
| Employees’ threshold | £91 pw | £89 pw |
| Employers’ threshold | £91 pw | £89 pw |
| Upper earnings limit - employees only | £610 pw | £595 pw |
| Employees’ Class 1 rate on earnings between threshold and upper earnings limit | 11% | 11% |
| Employees’ Class 1 rate on earnings above upper earnings limit |
1% | 1% |
| Employers’ Class 1 rate on earnings above threshold | 12.8% | 12.8% |
| Class 2 – self-employed flat rate | £2.05 pw | £2 pw |
| Class 2 – small earnings exception | £4,215 pa | £4,095 pa |
| Lower profit limit (for self-employed Class 4 contribution) | £4,745 | £4,615 |
| Upper profits limit | £31,720 | £30,940 |
| Class 4 rate on profits between lower and upper profits limit | 8% | 8% |
| Class 4 rate on profits above upper profits limit | 1% | 1% |
| Class 3 – voluntary | £7.15pw | £6.95pw |
Although employees’ NICs only become payable once earnings exceed £91 per week, any earnings between £79 and £91 per week in 2004/05 will protect an entitlement to basic state retirement benefits without incurring a liability to NIC.