As an employer you are required by law to operate the National Insurance Contributions (NICs) system accounting for your own and employees contributions. This is normally done through the Pay As You Earn (PAYE) system.
You may have to deduct Class 1 NIC from your employees. You may also have to pay Class 1A and Class 1B NIC after the end of the tax year. The following categories of NI may apply:
Class 1: Paid by people who work as employed earners, and their employers.
Class 1A: Paid by employers who provide certain directors and employees with benefits in kind which are available for private use, for example, cars and fuel.
Class 1B: Paid only by employers who enter into a Pay As You Earn (PAYE) Settlement Agreement (PSA) with HM Revenue and Customs for tax purposes.