At what rate are Class 2 National Insurance Contributions payable?

Class 2 National Insurance Contributions (NICs) are indeed payable at a flat rate, but only if the individual's profits exceed a specific threshold. This means that a self-employed individual pays a fixed amount of Class 2 NICs in a tax year, rather than a percentage of their profits. The threshold is established by HMRC, and if a self-employed person's profits fall below this threshold, they may not need to pay Class 2 contributions. This structure ensures that the contributions are manageable for those who earn lower amounts, while still providing social security benefits for higher earners who contribute.

The focus on a flat rate means that once the profits exceed the designated limit, the individual will then consistently pay the same amount, which simplifies the calculation and planning for taxes. This is distinct from Class 1 contributions that are based on earnings and made by employees and employers, which explains why options that suggest variations based on income percentages or employee-only contributions do not apply to Class 2 NICs.