National Insurance Category Letters: What A, B, C, H, M and Z Mean

Your National Insurance category letter is a single letter on your payslip that tells your employer's payroll which NI rates to apply to your wages. Most employees are on A, the standard letter; the others exist because you are under 21 (M), an apprentice under 25 (H), over State Pension age (C), already paying NI in another job (J or Z), or hold an old married woman's reduced-rate election (B).

The letter never changes your income tax. It only changes Class 1 National Insurance — and in several cases it reduces what your employer pays rather than what you pay.

Key points

• Category A is the default: 8% employee NI on earnings between £12,570 and £50,270, then 2% above, plus 15% employer NI above £5,000.
• Letters M (under 21) and H (apprentice under 25) leave your own NI unchanged but cut your employer's NI to 0% on most of your pay.
• Category C means no employee NI at all — used once you reach State Pension age. Your employer still pays.
• J and Z are deferment letters for people paying NI in a second job, charging a flat 2%.
• National Insurance is UK-wide: there are no separate Scottish or Welsh category letters or rates.

What a category letter actually does

Class 1 NI is worked out on each pay period using thresholds: the primary threshold (£12,570 a year) where employee NI starts, the upper earnings limit (£50,270) where the employee rate drops to 2%, and the secondary threshold (£5,000) where employer NI starts. The category letter tells payroll which of those thresholds to use and which percentages to apply. Full details of the percentages sit in our guide to National Insurance rates for 2026/27.

A wrong letter will not usually change your tax code or your take-home income tax, so it is easy to miss. But it can mean you pay NI you do not owe, or that your employer misses relief worth thousands.

Every National Insurance category letter for 2026/27

Annual equivalents are shown; payroll applies the weekly or monthly version.

Category A — the standard letter

If none of the special cases apply, you are on A. Someone on £35,000 pays (£35,000 − £12,570) × 8% = £1,794.40 a year, and their employer pays (£35,000 − £5,000) × 15% = £4,500.

Category M and Z — under 21

Category M is the most misunderstood letter because nothing changes for the employee. A 19-year-old on £30,000 still pays (£30,000 − £12,570) × 8% = £1,394.40, exactly as on letter A. The saving is the employer's: instead of (£30,000 − £5,000) × 15% = £3,750, they pay nothing, because earnings up to £50,270 sit below the upper secondary threshold. Payroll must move you to A (or the relevant alternative) from the first pay period after your 21st birthday.

Z is the same as M but for an under-21 who has a deferment certificate because another job already collects their main-rate NI.

Category H — apprentices under 25

H works like M but is based on the apprenticeship rather than your age alone: you must be under 25 and on an approved UK apprenticeship framework or standard, and the employer needs evidence of the agreement. Employer NI is 0% up to £50,270, then 15%. When the apprenticeship ends, or you turn 25, the letter reverts to A.

Category B — the married woman's reduced rate

B is a historical letter. No new reduced-rate elections have been allowed since May 1977, so it only applies to women who elected before then and have kept the election running without a break. The trade-off is that reduced-rate contributions do not build entitlement to the State Pension in your own right, which is why almost nobody benefits from keeping it today.

Category J — deferring NI in a second job

If you have two or more jobs, each employer applies the thresholds separately, so you can pay 8% twice on the same slice of income. Rather than reclaim it later, you can ask HMRC to let one employer use category J, charging a flat 2%. HMRC has to approve this in advance — payroll cannot simply choose it.

Freeport, investment zone and veteran letters

Employers in a freeport or investment zone tax site can use a second set of letters — F, I, S and L for freeports, and N, E, D and K for investment zones — which mirror A, B, C and J but give the employer 0% NI up to a special upper secondary threshold for a fixed period per employee. . Category V gives the same shape of relief for a veteran's first 12 months of civilian employment . None of these change the employee's own NI.

How to find your category letter

• Your payslip. Most payslips show it next to your NI number, often labelled "NI table", "NIC letter" or "NI cat".
• Your P60. The NI section is broken down by category letter, so a mid-year change shows as two lines.
• Ask payroll. They hold the letter in the payroll record and report it to HMRC on every Full Payment Submission.

If your P60 shows two letters and you only ever had one job, that is usually a legitimate change — a 21st birthday, an apprenticeship ending, or reaching State Pension age part-way through the year.

What if you are on the wrong letter?

Start with your employer, because the category letter lives in their payroll, not in your HMRC tax record. If the error is inside the current tax year, payroll can normally correct it and adjust your NI in the next pay run, so any overpayment comes back through your wages.

For earlier years, or if the employer has closed down, you can apply to HMRC for a refund of overpaid Class 1 NI using the guidance at gov.uk/claim-national-insurance-refund. Keep the payslips or P60s that show the wrong letter — HMRC will want the figures, not just the claim.

Two warnings. First, being on the wrong letter can also mean you have underpaid, and HMRC can ask for that. Second, a wrong letter that stopped your contributions could leave a gap in your NI record, which affects the 35 qualifying years needed for the full new State Pension of £241.30 a week.

Over State Pension age: category C

Once you reach State Pension age you stop paying Class 1 NI, whether or not you have claimed your pension and whether or not you keep working. Your employer moves you to category C from the first pay period after your birthday, and continues paying employer NI at 15% on earnings above £5,000.

The saving can be large. An employee on £40,000 who turns State Pension age at the start of the tax year pays £0 instead of (£40,000 − £12,570) × 8% = £2,194.40.

Two practical points. Payroll needs proof of your date of birth — a passport, birth certificate or an age exception letter from HMRC — before it can switch you to C, and some employers will keep deducting until they get it. And State Pension age is 66, rising to 67 in stages between 2026 and 2028, so the date you qualify depends on your date of birth rather than a fixed age.

What to do next

Check the letter on your latest payslip against the table above, and if it looks wrong, ask payroll before you contact HMRC. To see what your NI should be on your current pay, run the figures through the National Insurance calculator, then compare the result with your payslip deduction. If the two differ, the 2026/27 National Insurance rates guide sets out every threshold used in the calculation.