UK National Insurance rates and thresholds 2026/27: a complete guide for employees, the self-employed, and employers
Employee NI is 8% above £12,570 and 2% above £50,270. Self-employed Class 4 is 6% / 2% on the same bands. Class 2 is voluntary in some cases. Full rate table and worked examples.
In one sentence
For 2026/27 UK employees pay 8% National Insurance on earnings between £12,570 and £50,270, plus 2% on earnings above £50,270; self-employed sole traders pay Class 4 NI at 6% and 2% on the same bands, while Class 2 may be voluntary.
Quick answer
- Employee NI: 8% on £12,570 to £50,270, 2% above £50,270
- Self-employed Class 4: 6% on the same bands, 2% above £50,270
- Class 2 NI is not normally charged automatically; voluntary payments can still apply
- Employer NI is 15% above £5,000 per employee from 6 April 2025 onwards
- NI counts towards your State Pension and certain contributory benefits
Steps
- 1Confirm whether you are an employee, self-employed, or an employer
- 2Identify your earnings or profit for the year
- 3Apply the relevant NI band to each slice (no NI under £12,570)
- 4Check your NI record online to see how many qualifying years you have
- 5Consider voluntary Class 3 contributions if you have gaps and want a full State Pension
- 6Get professional advice if your situation crosses thresholds (multiple jobs, employed + self-employed)
National Insurance at a glance, 2026/27
National Insurance (NI) is the second deduction from UK earnings alongside income tax. It can count towards the State Pension and certain contributory 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 | £3.65/week | Optional, profits below £7,105 |
| Anyone with gaps | Class 3 (voluntary) | £18.40/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).
National Insurance rates 2025/26 vs 2026/27
| Item | 2025/26 | 2026/27 |
|---|---|---|
| Employee Class 1 main rate | 8% | 8% |
| Employee rate above £50,270 | 2% | 2% |
| Employer rate | 15% | 15% |
| Employer threshold | £5,000 | £5,000 |
| Class 4 main rate | 6% | 6% |
| Class 4 rate above £50,270 | 2% | 2% |
| Class 2 voluntary | £3.50/week | £3.65/week |
| Small profits threshold | £6,845 | £7,105 |
| Class 3 voluntary | £17.75/week | £18.40/week |
| Employment Allowance | £10,500 | £10,500 |
Rates are unchanged; only the voluntary Class 2 and Class 3 amounts and the small profits threshold moved.
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.
How is National Insurance calculated?
Employee Class 1 NI is worked out on each pay period, not on the year. A one-off bonus month can mean more NI than an annual sum suggests. Directors are calculated on an annual earnings period instead.
The employee thresholds for 2026/27 are:
| Threshold | Weekly | Monthly | Annual |
|---|---|---|---|
| Primary threshold | £242 | £1,048 | £12,570 |
| Upper earnings limit | £967 | £4,189 | £50,270 |
For £3,000 gross monthly pay, employee NI is (£3,000 − £1,048) × 8% = £156.16 a month. Self-employed Class 4 is worked out once a year on taxable profit in the Self Assessment return.
You can work out tax and NI on a salary or read about what National Insurance is and what it pays for.
Self-employed: Class 4 and voluntary 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 is not normally charged automatically.If your profits are at or above the small profits threshold, your year can still count towards contributory benefits without a Class 2 payment. The detail depends on your record and circumstances.
If your profits are below £7,105, you may be able to pay Class 2 voluntarily at £3.65 a week for 2026/27. Check your record and forecast before deciding whether a voluntary payment is appropriate.
How to pay National Insurance when self-employed
- Register as self-employed with HMRC. You get a Unique Taxpayer Reference (UTR).
- Class 4 is calculated in your Self Assessment return and paid with income tax by 31 January after the tax year. Payments on account are due by 31 January and 31 July if your bill is over £1,000, unless more than 80% of your tax is already collected at source.
- Voluntary Class 2 is paid through the Self Assessment return too, or via HMRC if you are not in Self Assessment.
Our Self Assessment service can prepare and file the return for you.
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 |
Work out employer NI yourself
For an annual salary above £5,000, calculate employer NI as (annual salary − £5,000) × 15%. For a £30,000 salary, (£30,000 − £5,000) × 15% = £3,750.
Employment Allowance of up to £10,500 can reduce the bill if you are eligible. Single-director companies with no other employees cannot claim it. Our payroll service runs these calculations every pay period.
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 calculation can be more complicated than applying the two sets of bands independently. HMRC applies rules for people with more than one source of NI-bearing income.
The final position is settled through the relevant PAYE and Self Assessment processes. Take advice where you have multiple jobs, director payroll or both employment and self-employment income.
Voluntary contributions and your State Pension
Your State Pension forecast depends on your National Insurance record and individual circumstances. Check the forecast before deciding whether to fill a gap with voluntary contributions.
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 £18.40 a week for 2026/27. 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)?
- Which years HMRC confirms can still be filled.
Do not assume every gap is worth filling. The cost, increase in forecast and value of a voluntary contribution depend on your own record. GOV.UK provides the official record and forecast services.
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 30-minute call with RR Accountants is enough to sense-check the position and recover any overpayments.
Book a call →Frequently asked questions
How is National Insurance calculated?
Employee Class 1 NI is worked out for each pay period, so a one-off bonus month can mean more NI than an annual sum suggests; directors use an annual earnings period instead. For 2026/27, the primary threshold is £242 a week or £1,048 a month (£12,570 a year), and the upper earnings limit is £967 a week or £4,189 a month (£50,270 a year). On £3,000 gross monthly pay, (£3,000 − £1,048) × 8% gives £156.16 NI a month. Self-employed Class 4 is calculated once a year on taxable profit in the Self Assessment return.
How do I pay National Insurance if I am self-employed?
Register as self-employed with HMRC to get a Unique Taxpayer Reference (UTR). Class 4 is calculated in your Self Assessment return and paid with income tax by 31 January after the tax year. Payments on account are due by 31 January and 31 July if your bill is over £1,000, unless more than 80% of your tax is already collected at source. Voluntary Class 2 is also paid through Self Assessment, or via HMRC if you are not in Self Assessment.
What are Class 2 and Class 4 National Insurance?
Class 2 is a voluntary flat-rate contribution for some self-employed people with profits below £7,105, at £3.65 a week for 2026/27. At or above the small profits threshold, the year can count towards contributory benefits without a Class 2 payment, depending on your record and circumstances. Class 4 is calculated through Self Assessment on annual taxable trading profit: 6% between £12,570 and £50,270, then 2% above £50,270.
Did National Insurance rates change for 2026/27?
Employee rates remain 8% and 2%, Class 4 rates remain 6% and 2%, and the employer rate remains 15% above £5,000. Employment Allowance remains £10,500. Only voluntary Class 2 (£3.50 to £3.65 a week), voluntary Class 3 (£17.75 to £18.40 a week) and the small profits threshold (£6,845 to £7,105) changed from 2025/26.
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 (£7,105 for 2026/27) 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.
Key terms
- National Insurance
- A second tax-like deduction on UK earnings that funds State Pension, contribution-based Jobseeker's Allowance, Maternity Allowance, and a few other benefits. Separate from income tax but calculated through the same payroll system.
- Class 1 NI
- The NI paid by employees and their employers. Employees pay the 'primary' contribution (8% / 2%); employers pay the 'secondary' contribution (15% from April 2025).
- Class 2 NI
- A voluntary flat-rate NI payment for some self-employed people. It is not normally charged automatically, but people below the small profits threshold may choose to pay it to protect benefit entitlement.
- Class 4 NI
- Profit-based NI for sole traders, calculated on Self Assessment. 6% on profits between £12,570 and £50,270, 2% on profits above. Does not by itself qualify you for benefits.
- Class 3 NI
- Voluntary contributions you can buy to plug gaps in your NI record. Useful if you want a full State Pension and your record has missing years.
Need help with this?
Book a call and we will explain the next steps clearly.