| Commentary

29 National insurance contributions

| Commentary

29 National insurance contributions

Dividends do not attract national insurance contribution payments. Salaries and director’s fees, however, trigger Class 1 contributions from both the employer company and the recipient employee or director. The contributions paid by the employee are known as primary contributions1 and those paid by the company, secondary contributions2.

For the tax year 2011/12, Class 1 contributions are payable as follows3:

  1. 29.1

        on weekly earnings not exceeding £139, the employee’s primary contributions and the employer’s secondary contributions are both nil;

  2. 29.2

        on weekly earnings exceeding £139 but not exceeding £817, the employee’s

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