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A tax on earnings that builds your entitlement to certain benefits and the State Pension.
National Insurance is a tax on earnings paid by employees, employers, and the self-employed. It funds the NHS, State Pension, and other benefits. Most employees pay Class 1 NI (8% on earnings between thresholds, 2% above the upper limit). The self-employed typically pay Class 2 and Class 4 NI. Your NI record determines your eligibility for certain benefits and the full State Pension.
This definition is for informational purposes only and does not constitute tax, legal, or financial advice. Rules may change and outcomes depend on your circumstances.
These GOV.UK and HMRC sources provide the official context for this glossary entry. The definition is educational and does not determine your individual tax position.