Your National Insurance category letter tells your employer which set of Class 1 rates applies to you and to them. Most employees are on category A, which pays 8% on earnings between the primary threshold and the upper earnings limit and 2% above it. The letter is not your tax code and has nothing to do with income tax.
What the letter is for
National Insurance is not charged at one rate for everybody. Some people pay a reduced rate, some pay none, and for some employees the employer pays less than usual. The category letter is how payroll knows which of those applies.
It sits beside the National Insurance line on your payslip, usually as a single character. It is set from facts your employer holds about you: your age, whether you have reached State Pension age, whether you are an apprentice, and in a few cases an election you made yourself.
It is not your tax code, it does not appear in your tax code, and changing one has no effect on the other. Income tax and National Insurance are separate charges worked out from separate figures.
Category A: the standard one
Category A covers most employees, and it is the one every other letter is a variation of.
For 2026/27 it charges nothing on earnings up to the primary threshold, £1,048 a month or £242 a week, which is £12,570 across a year. Earnings above that are charged at 8% up to the upper earnings limit of £50,270, and at 2% above it.
Your employer pays secondary contributions at 15% on your earnings above £5,000 a year. That is a cost to them rather than a deduction from you, and it never appears on your payslip.
The other letters, and what each changes
Category C is for employees over State Pension age. The employee rate is 0%, so nothing is deducted from your pay, and the employer carries on paying its own contributions as normal.
Category B is for a small and closing group: married women and widows who hold a valid election to pay reduced-rate contributions, made under rules that shut to new entrants in 1977. They pay a reduced main rate rather than the standard one.
Category H is for apprentices under 25 on an approved apprenticeship, and category M for employees under 21. Both give the employer relief from secondary contributions up to a threshold of their own. Neither changes what the employee pays.
Category V is for veterans in the first year of their first civilian employment after leaving the armed forces, and again the relief is the employer's.
Categories J and Z are deferment categories, for someone who is already paying National Insurance in another job and has been given permission to defer. J is the general one and Z is its equivalent for employees under 21. Deferment does not remove the charge; it collects the reduced upper rate now and settles the position afterwards.
Category X marks someone with no liability at all, such as an employee under 16.
There is a further set of letters for employees working in a special tax site inside a freeport or an investment zone, where the employer gets relief on its secondary contributions. Freeport sites use F, I, L and S, and investment zone sites use N, E, D and K. Each one mirrors a standard letter: the plain one, the reduced-rate one, the deferment one and the over-State-Pension-age one. What the employee pays is unchanged.
Why the letter matters to you
Most of the letters change what your employer pays rather than what you pay, so the wrong one is often invisible on a payslip. The exceptions are the ones that matter most: category C should mean no employee deduction at all, and category B should mean a reduced one.
If you have reached State Pension age and National Insurance is still coming out of your pay, that is a category letter question rather than a tax code question, and the evidence your employer needs is proof of your date of birth.
For most letters your entitlements are unaffected: what builds your State Pension record is earnings at or above the lower earnings limit, £6,708 a year, rather than which letter your employer used. Category B is the exception the other way. GOV.UK states that paying the married woman's reduced rate means your State Pension will be reduced and that you will not usually be entitled to benefits based on your own contributions, which is why the election closed to new entrants.
It applies per job and per pay period
National Insurance is charged on the earnings of one employment in one pay period, without regard to your other jobs. So you can hold different category letters in two jobs, and each employer applies its own thresholds to its own pay.
That is why two jobs each paying under £1,048 a month attract no employee National Insurance at all, and why a month with a bonus is charged more heavily than the annual figures would suggest.
The exception is two jobs with the same employer, or with employers carrying on business in association with each other, where the earnings are added together first.
How to check yours
Look for a single letter beside the National Insurance line on your payslip. If there is none, ask your employer which category you are on rather than assuming it is A.
Then check that it matches your circumstances: your age, whether you have passed State Pension age, and whether you are on a recognised apprenticeship. Where it does not, the correction is your employer's to make, because the category letter is set by payroll from the facts rather than issued by HMRC the way a tax code is.
Does the letter change my income tax?
No. Income tax is worked out from your tax code and your taxable pay, and National Insurance from your category letter and your earnings in the period. The two calculations share a payslip and nothing else, which is why a wrong tax code leaves the National Insurance line untouched and a wrong category letter leaves the tax line untouched.