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How much National Insurance will I pay if I’m in a partnership?

A partnership is a business which is owned and managed by more than one person. The partners are jointly responsible for all aspects of the business and will share the profits. Partners will usually pay national insurance contributions on their share of the profits.

What is National Insurance?

National insurance contributions are compulsory payments made by employees, employers and the self-employed (including partners) towards certain state benefits. The contributions are made at various different rates (all figures quoted are for the 2020/21 tax year).

You pay National Insurance if you’re:

  • 16 or over
  • an employee earning above £183 a week
  • self-employed and making a profit of £6,475 or more a year.

You need a National Insurance number before you can start paying National Insurance contributions.

How much National Insurance will I pay?

National Insurance contributions are payable by individuals between the ages of 16 and state retirement age.

For partners there are two types:

Type of Insurance Amount payable (2020/2021)
Class 2 A flat rate of £3.05 per week if your share of profits exceed £6,475 per annum.
Class 4 Based on the partners’ profits: 9% between £9,500 and £50,000 and 2% over £50,000.

Use our tax and national insurance calculator below to work out what your liability will be. 

Self employed tax and national insurance calculator

Use our handy calculator to find out how much tax will you will pay*

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Please note that the results you see on your screen are estimates only. This is based on base rates and does not include things such as student loans. For full details of tax allowances, please see our article on 2020/21 tax rates.

Your take home pay and calculation

Please note that the results you see on your screen are estimates only. This is based on base rates and does not include things such as student loans. For full details of tax allowances, please see our article on 2020/21 tax rates.

How and when will I pay National Insurance?

National Insurance contributions for partners are payable at the same time as the Income Tax is due.

Income Tax and National Insurance contributions for partners are payable by 31 January following the tax year to which they relate.

If the amount exceeds £1,000 an individual is required to make a payment on account for the next tax year.

Payments on account are due by 31 January and 31 July.

Do I need to register to pay National Insurance?

When you become a partner you will need to register with HMRC. This can be done online through HMRC.

The registration process will include details on how to pay National Insurance.

 

Should I consider paying voluntary contributions?

You may wish to consider paying voluntary National Insurance Contributions if there is a gap in your record. This will ensure that you are eligible to a full state pension when you reach state retirement age.

You may get gaps in your record if you don’t pay National Insurance or don’t get National Insurance credits. This could be because you were:

  • employed but had low earnings
  • unemployed and weren’t claiming benefits
  • self-employed but didn’t pay contributions because of small profits
  • living abroad.

For details on how to check your national insurance record go to GOV.UK

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