National Insurance 2026/27: Employee and Self-Employed Rates
Quick answer
For 2026/27, employees pay 8% National Insurance on earnings between £12,570 and £50,270, then 2% above. The self-employed pay 6% Class 4 between the same thresholds. Here is how it works, with real examples, and how to check what you owe.
National Insurance is the "second income tax" most people pay without ever quite understanding it. It funds the State Pension and other benefits, and how much you pay depends on whether you are employed or self-employed. This guide explains the 2026/27 National Insurance rates, walks through real examples for both employees and the self-employed, and shows how to check your own contributions.
Quick summary
- Employee (Class 1): 8% on £12,570–£50,270, then 2% above
- Self-employed (Class 4): 6% on £12,570–£50,270, then 2% above
- Class 2: generally no longer payable, but a State Pension credit is still earned
- Over State Pension age: you generally stop paying NI on earnings
Employee National Insurance
If you are employed, Class 1 National Insurance is deducted from your pay:
| Earnings band | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,570–£50,270 | 8% |
| Above £50,270 | 2% |
It is worked out per pay period, not cumulatively like income tax, so a one-off bonus can attract more NI in that month. See your full deductions with the salary calculator or the dedicated National Insurance calculator.
Self-employed National Insurance
Sole traders pay Class 4 NI on profits: 6% between £12,570 and £50,270, then 2% above. Class 2 contributions are no longer payable for most people - those with profits above the Small Profits Threshold receive the National Insurance credit toward their State Pension without paying. Estimate your bill with the self-employed tax calculator.
Real-life examples
Example 1 - an employee on £40,000. Sarah earns £40,000. She pays 8% on the £27,430 above £12,570 - about £2,194 of NI for the year, on top of income tax.
Example 2 - a sole trader on £40,000 profit. Mo is self-employed with £40,000 profit. He pays 6% Class 4 on the same £27,430 band - about £1,646 - less than an employee on the same figure. Compare the two with the PAYE vs self-employed calculator.
Example 3 - a high earner. Priya earns £70,000. She pays 8% on the slice up to £50,270 and just 2% on the £19,730 above it, because the rate drops sharply once you pass the upper threshold.
Who should check this
- Anyone changing jobs or going self-employed - the rates differ.
- People over State Pension age, who generally stop paying NI on earnings.
- Those with gaps in their record, who may benefit from voluntary contributions to protect their State Pension.
How to manage your National Insurance
- Check your record for gaps that could reduce your State Pension; voluntary contributions can sometimes fill them.
- Use salary sacrifice for pensions, which can reduce the earnings on which NI is charged.
- Plan bonuses if possible, as NI is calculated per pay period.
Common mistakes to avoid
Don't assume self-employment always means lower NI overall - you lose some employee benefits and pay differently. Don't ignore gaps in your NI record; they can cost you State Pension later. And remember NI stops on earnings once you reach State Pension age, so check you're not still being deducted.
What National Insurance actually pays for
Unlike income tax, National Insurance is linked to certain benefits - most importantly the State Pension. Your NI record determines whether you qualify for the full new State Pension, which usually requires about 35 qualifying years, with a minimum of around 10 years needed to get anything at all. Contributions also build entitlement to certain other benefits. This is why gaps in your record matter: a year with too little NI can reduce your eventual pension, sometimes by more than the cost of filling the gap voluntarily.
It is also why the self-employed Class 2 change is significant. Even though most self-employed people no longer pay Class 2, those with profits above the Small Profits Threshold still receive the National Insurance credit toward their State Pension - so they keep the benefit without the cost. Those with very low profits, however, may still want to pay Class 2 voluntarily to protect their pension record.
More real-life examples
Example 4 - a second job. Leah has two part-time jobs, each paying £11,000. Because NI is worked out per job and each is below the £12,570 threshold, she may pay little or no NI - but she should check whether her combined record still earns a qualifying year toward her State Pension, as low earnings across multiple jobs can leave a gap.
Example 5 - going self-employed. Daniel leaves a £45,000 job to go self-employed with £45,000 of profit. As an employee he paid 8% Class 1 NI; as a sole trader he pays 6% Class 4 on the same band - a saving on NI, though he loses entitlements such as statutory sick and redundancy pay. Compare the overall position with the PAYE vs self-employed calculator.
Example 6 - filling a gap. Priya finds she has a missing year in her NI record from a period abroad. Paying a voluntary contribution to fill it could add a meaningful amount to her eventual State Pension - but only if she would otherwise fall short of the years needed, so it is worth checking her forecast first.
How to protect your record
Two habits help. First, check your National Insurance record and State Pension forecast periodically, so you spot gaps while you can still fill them - there are time limits on how far back you can pay. Second, if you use salary sacrifice for pension contributions, be aware it reduces the earnings on which NI is charged, which lowers your NI now; this is usually beneficial but very low earners should make sure it doesn't drop them below the level needed for a qualifying year. The National Insurance calculator shows what you're paying.
Why NI is calculated differently from income tax
One feature of National Insurance surprises almost everyone the first time they notice it: for employees it is worked out separately for each pay period, not cumulatively across the year like income tax. That means a month with a big bonus can attract a lot of NI, even if your annual earnings are modest, because that single month's pay sits high above the monthly threshold. Income tax, by contrast, smooths out over the year through your tax code. This is why an annual-salary calculator can only approximate NI - it applies the yearly thresholds, whereas your actual deductions follow the monthly or weekly figures.
The practical takeaway is to be aware that irregular pay - bonuses, commission, overtime concentrated in one month - can carry more NI than the same amount spread evenly. Where you have any influence over timing, smoother pay is slightly more NI-efficient, though for most employees this is a minor effect.
A worked example: employee versus sole trader
Compare two people each with £45,000 a year. The employee pays Class 1 NI at 8% on earnings between £12,570 and £45,000 - about £2,594 for the year - on top of income tax. The sole trader with £45,000 of profit pays Class 4 NI at 6% on the same band, about £1,946, and generally no Class 2. So the self-employed person pays roughly £648 less in NI on the same income. However, the employee receives entitlements the sole trader does not, such as statutory sick pay, holiday pay, redundancy rights and employer pension contributions. The lower NI is not a free lunch - it reflects fewer protections. Weigh the whole picture with the PAYE vs self-employed calculator rather than NI alone.
Checking and protecting your record
Because your NI record drives your State Pension, it is worth reviewing it every few years. You can see your record and a State Pension forecast through HMRC, which shows any gap years and whether you are on track for the full pension. If you find a gap - perhaps from time abroad, low earnings, or self-employment with very low profits - you may be able to pay a voluntary contribution to fill it, but only do so if it would actually increase your entitlement, as there are time limits and it is not always worth it. The National Insurance calculator shows what you are paying now, and the salary calculator puts it in the context of your full deductions.
Key takeaways
- Employees pay 8% NI on earnings between £12,570 and £50,270, then 2% above.
- The self-employed pay 6% Class 4 on the same band, then 2% above; Class 2 is generally no longer payable.
- Employee NI is worked out per pay period, so a bonus month can attract more NI.
- You generally stop paying NI on earnings once you reach State Pension age.
- Your NI record drives your State Pension - about 35 years are needed for the full new pension.
- Check your record for gaps; voluntary contributions can help, but only if they raise your entitlement.
The bottom line
National Insurance is a major slice of most people's deductions, and the rates differ between employees and the self-employed. Knowing the thresholds - £12,570 and £50,270 - helps you understand your payslip and plan. It also pays to remember that National Insurance is not just a deduction but the foundation of your State Pension, so keeping your record complete is as important as understanding what you pay each month. The official rates are on GOV.UK.
General information only, not personal advice.
Written by
Laura Michelle Davis — Chartered Tax Adviser (CTA)
ACCA · CTA (Chartered Tax Adviser) · ATT · BSc Economics, UC Berkeley
Laura Michelle Davis is a Chartered Tax Adviser (CTA) who also holds the ACCA and ATT qualifications and a BSc in Economics from UC Berkeley. She specialises in UK personal tax, covering income tax, National Insurance, self-employment and capital gains, and has built her career making complicated rules easy to follow. At TaxFly, Laura writes and edits the tax guides and explainers, checking that figures reflect current HMRC rates and that every explanation answers the question a real person is actually asking. Her goal is plain-English clarity you can trust and act on.
