What is employer National Insurance?

National Insurance is a tax on earnings and self-employed profits that is paid by employees, employers and the self-employed. The contributions go into the National Insurance Fund which was established in 1948 to pay for social benefits including unemployment benefit, sickness benefit, and retirement pensions.

There are four main classes of National Insurance:

• Class 1 is paid by employees
• Class 2 is paid if you’re self-employed
• Class 3 is a voluntary contribution
• Class 4 is paid if you’re self-employed and have profits over a certain amount

Using Employment Hero to help with processing employer National Insurance

As an employer, you are responsible for ensuring that your employees are paid correctly and on time. It’s also your responsibility to deduct income tax and NICs from your employees’ wages, as well as pay your employer NICs, and report to and pay HMRC every month.

None of this is easy, especially when payroll tasks are only one of your responsibilities. Whilst it’s possible to run payroll manually, this opens you up to non-compliance risks.

Payroll software can help you process payroll quickly, easily and more accurately. Using HMRC-recognised payroll software like Employment Hero to manage your Real Time Information (RTI) PAYE payments and deductions makes payroll a breeze.