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Definition
National Insurance (NI) is a contribution paid by employees, employers and the self-employed that funds state benefits and the state pension. Employees pay through PAYE, and employers pay a separate charge on top of wages.
In plain terms
It is a tax by another name. Employees have NI deducted from pay; the company additionally pays employer's NI as a cost of employing them. The self-employed pay their own classes.
Why it matters for your company
For an employer, NI is a real and often underestimated cost of every hire. The Employment Allowance reduces the employer's share for eligible businesses. Budget for it in the true cost of payroll.
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