National InsuranceFirst introduced by the National Insurance Act of 1911, the National Insurance system continues to fund some of the most important and necessary programs.
The National Insurance system is very similar to that of the UK. Currently, there are 4 classes of contribution with Class 1 being the most used as it is for employers and employees.
How are contributions made?
For employees, national insurance will be taken out of your pay check automatically by your employer. The rate of this is 11-12%, depending on wages. If you are self-employed, you will be in Class 2 or 4 with your contribution coming as a percentage of profits.
What do National Insurance payments fund?
National Insurance payments go towards the NHS (National Health Service), State Pensions, unemployment benefits, maternity allowance and other social programs.
What is the NHS?
The NHS allows residents to seek medical attention at no ‘out of pocket’ cost. The Isle of Man has 14 GP practices around the island and a state of the art hospital, Nobles. The Isle of Man also has a fantastic Doctor on Duty phone service called MEDS (Manx Emergency Doctor Service) for any middle of the night mini-emergencies. (If you have chest pain or a life-threatening emergency you should always call 999.)
National Insurance Holiday Scheme
To grow the Island’s working population; the Isle of Man is offering a National Insurance Holiday Scheme which allows newly employed, relocated or returning residents to apply for a refund on their National Insurance contributions for their first year of living or returning to the Isle of Man, with refunds capped at £4,000.
The scheme will be open to anyone who has not been and Isle of Man tax resident for the immediate last five tax years, and who takes up both residence and full time, permanent employment with a gross salary of £21,000 or more, on or after 6th April 2019.
Returning students are also eligible for this scheme after completing a full time university degree, higher national diploma or postgraduate course outside the Island. Minimum salary requirements do not apply to returning students.
‘This scheme enhances the already compelling reasons to live and work in the Isle of Man. We have excellent quality of life, opportunities for career progression and average salaries which are higher than the UK. We believe this will be a fantastic incentive for Manx nationals to return home, as well as attracting new workers to our shores.’
Under the new scheme, an individual earning a £30,000 salary will take home £27,450 in their first year of living in the Island – £3,650 more than their UK counterparts. This represents a 15% increase compared with the UK as those earning the same salary would keep £23,800. Average salaries for full time employees are already more than 14% higher in the Isle of Man than the UK.
For more information about National Insurance, click here.
For more information Income Tax in the Isle of Man, click here.