what is national insurance tax

National Insurance is a tax on earnings and self-employed profits paid by employees, employers, and the self-employed. It helps build entitlement to certain benefits, such as the State Pension and Maternity Allowance. The amount of National Insurance you pay depends on your employment status, how much you earn, and your personal circumstances. There are different classes of National Insurance, and the rates vary depending on the class. For example, Class 1 is paid by employees and employers, while Class 2 is paid if you're self-employed. The rates for the tax year 2023 to 2024 for Class 1 National Insurance are 12% on earnings between £242.01 and £967, and 2% on earnings above £967 a week. Employers also pay a different rate of National Insurance depending on their employees' category letters