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3. National Insurance

3.1 Rates

National Insurance rates and contribution limits are as follows for 2005/2006:-

The employee’s Primary Class 1 National Insurance rate is 11% on earnings between the Primary Threshold (£94 per week) and Upper Earnings Limit (£630 per week).

Employees, in addition, pay 1% Primary Class 1 National Insurance on all earnings above the Upper Earnings Limit.

The Employer’s Secondary Class 1 contribution rate on earnings above the Secondary Threshold (£94 per week) is 12.8%.

The self-employed Class 4 rate on profits between the lower (£4,895 pa) and upper profits limit (£32,760 pa) is 8%.

The self-employed, in addition, pay Class 4 contributions at a rate of 1% on all profits above the upper profits limit.

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