What are the National Insurance rates for 2026/27?

For employees: 8% on earnings between £12,570 and £50,270, 2% on earnings above £50,270. For the self-employed (Class 4): 6% on profits between £12,570 and £50,270, 2% above. There is no NI on income below £12,570. Employer NI is 15% on earnings above £5,000 per employee.

Was Class 2 NI really abolished?

For most self-employed people, yes. From 6 April 2024, Class 2 NI is no longer charged automatically. You can still pay it voluntarily if your profits are below the small profits threshold (£6,845) and you want the year to count toward your State Pension entitlement. For everyone else, only Class 4 NI applies.

How much NI do I pay on £40,000?

An employee on £40,000 pays £2,194 in NI for 2026/27: (£40,000 − £12,570) × 8% = £2,194. A self-employed sole trader making £40,000 profit pays £1,646 in Class 4 NI: (£40,000 − £12,570) × 6% = £1,646. The self-employed save the 2% gap because they no longer pay Class 2.

Do I pay NI on income above £50,270?

Yes, but only at 2% (not 8%). So a £100,000 employee salary attracts: (£50,270 − £12,570) × 8% + (£100,000 − £50,270) × 2% = £3,016 + £994.60 = around £4,011 NI. The drop to 2% above the higher rate threshold is sometimes called the NI 'upper earnings limit' and the rate above it is the 'upper earnings rate'.

What changed for employer NI in April 2025?

Two big changes. The rate rose from 13.8% to 15%. And the secondary threshold (the level at which employer NI starts) dropped from £9,100 to £5,000 per employee. So employer NI now starts much earlier and at a higher rate. For most small employers the bill went up. The Employment Allowance was raised to £10,500 to offset the impact on small businesses.

How do I check my National Insurance record?

Log in to your Personal Tax Account at gov.uk/check-state-pension. You can see all your contribution years, any gaps, and your forecast State Pension. You can also buy voluntary contributions through the same service if you have missing years and want to top up. Gaps from the last six tax years are usually still buyable; older gaps are often locked.

UK National Insurance rates and thresholds 2026/27: a complete guide for employees, the self-employed, and employers

National Insurance at a glance, 2026/27

National Insurance (NI) is the second deduction from UK earnings alongside income tax. It funds the State Pension and a handful of contribution-based benefits. The rates depend on whether you are an employee, self-employed, or running payroll for staff.

Who pays	Class	Rate	On earnings/profits
Employee	Class 1 primary	8%	£12,571 to £50,270
Employee	Class 1 primary	2%	Above £50,270
Employer	Class 1 secondary	15%	Above £5,000 per employee per year
Self-employed	Class 4	6%	£12,571 to £50,270 of profit
Self-employed	Class 4	2%	Profit above £50,270
Self-employed (voluntary)	Class 2	£3.50/week	Optional, profits below £6,845
Anyone with gaps	Class 3 (voluntary)	£17.85/week	To plug gaps in NI record

Three things to flag up front: employee NI dropped to 8% in April 2024 (from 10%); Class 2 NI was abolished for most self-employed people in April 2024; and employer NI changed substantially in April 2025 (rate up to 15%, threshold down to £5,000).

Employee National Insurance

If you are an employee, your employer deducts NI from each pay run alongside income tax. The rates above are applied to your earnings band by band, same way as income tax. There is no NI on the first £12,570 you earn in the year.

Worked examples for common salaries:

Salary	NI in main band	NI above £50,270	Total NI
£25,000	£994 (8% of £12,430)	£0	£994
£40,000	£2,194	£0	£2,194
£50,000	£2,994	£0	£2,994
£75,000	£3,016	£494	£3,510
£100,000	£3,016	£995	£4,011

Notice how NI growth slows above £50,270, you only pay 2% on the higher band. That said, income tax goes up to 40% in the same band, so total deductions still climb fast. The full take-home breakdown is in our take-home pay article.

Self-employed: Class 4 (and the death of Class 2)

Sole traders pay Class 4 NI on their trading profits, calculated and collected through Self Assessment. The rates and bands are:

0% on the first £12,570 of profit
6% on profits between £12,570 and £50,270
2% on profits above £50,270

Class 2 NI was abolished from 6 April 2024 for almost all self-employed people. Before that change, sole traders paid £3.45 a week (around £179 a year) on top of Class 4. That flat-rate Class 2 contribution is now gone, but the year still counts toward your State Pension entitlement provided your profits are above the small profits threshold (£6,845).

If your profits are below £6,845, the year does not automatically count toward State Pension. You can still pay Class 2 voluntarily (£3.50 a week for 2026/27) if you want the year to qualify. This usually makes sense if you are short on qualifying years.

Worked example: sole trader with £40,000 profit

Take a sole trader with £40,000 of net trading profit:

Income tax: (£40,000 − £12,570) × 20% = £5,486
Class 4 NI: (£40,000 − £12,570) × 6% = £1,646
Total deductions: £7,132
Net retained profit: £32,868

By comparison, an employee on the same £40,000 salary pays £5,486 of income tax and £2,194 of NI, total deductions £7,680 and take-home of £32,320. The sole trader is about £550 better off on the same gross. They also save the cost of employer NI (which an employee earns through their salary anyway).

Employer National Insurance, what changed in April 2025

If you run payroll, the most important number to remember is 15% above £5,000 per employee. Two changes in April 2025:

Rate up: 13.8% became 15%
Threshold down: the secondary threshold dropped from £9,100 to £5,000 a year per employee

These two changes combined are the biggest payroll cost increase UK employers have seen in over a decade. The Employment Allowance was raised to £10,500 a year per business to offset the impact on small employers, but most businesses with payroll bills over about £100,000 a year pay more NI now than they did before.

What employer NI looks like in numbers

Employee salary	Employer NI bill	Real cost to employer
£25,000	£3,000	£28,000
£40,000	£5,250	£45,250
£60,000	£8,250	£68,250
£100,000	£14,250	£114,250

So when an employee asks for a £5,000 pay rise, the actual impact on the employer is closer to £5,750 once secondary NI is included. Worth remembering when budgeting headcount.

Employed AND self-employed: how the two interact

If you have both a job (PAYE) and a side trade (sole trader), you pay both Class 1 (through PAYE) and Class 4 (through Self Assessment). The good news: HMRC applies an annual maximum so you do not pay more than the total NI you would have paid if all the income were from a single source.

The Self Assessment calculation handles this automatically. The formula is fiddly, but in practice it means high earners with dual employment / self-employment do not get hit twice for the same income.

Voluntary contributions and your State Pension

To get the full new State Pension (around £230 a week for 2026/27, £11,973 a year), you need 35 qualifying years of NI contributions. To get any State Pension at all, you need at least 10 qualifying years.

You can check your record at gov.uk/check-state-pension. If you have gaps and want to top up, you can buy voluntary Class 3 contributions at £17.85 a week. The decision usually comes down to:

How many qualifying years are you short of 35?
How old are you (the closer to State Pension age, the better the return)?
Are the gaps from the last 6 years (usually buyable) or older (sometimes locked)?

A full year of Class 3 currently costs around £930 and buys you 1/35 of the full State Pension (about £342 a year for life). Payback period: under 3 years from the date you start drawing. For most people with gaps, this is one of the best returns available on a small lump sum.

Common NI mistakes we see

Not knowing about Class 2 abolition. Self-employed clients still ask whether they need to pay Class 2 separately. They do not, unless they specifically want to.
Paying NI on dividends. Dividends do not attract NI. Only earnings and self-employment profits do.
Forgetting NI when working out a pay rise. Employees often calculate the take-home effect on income tax alone and forget the 8% NI on top.
Missing the annual maximum. People with multiple sources of NI-bearing income do not always claim the cap, leaving NI overpaid.
Ignoring State Pension forecasts. The forecast can be 10 to 15 years out of date in people's heads. Worth checking online once a year.

NI position not quite right?

If you have multiple sources of NI-bearing income, gaps in your contribution record, or staff cost questions after the April 2025 changes, a 20-minute call with RR Accountants is enough to sense-check the position and recover any overpayments.

Book a call →