National Insurance (NI) is one of those deductions on your payslip that many people never fully understand. Yet it directly affects your take-home pay, your State Pension entitlement, and your eligibility for certain benefits. This guide explains how NI works in 2025/26, what you pay, and why it matters.
What Is National Insurance?
National Insurance is a tax on earnings and profits paid by workers and employers in the UK. The contributions fund the State Pension, the NHS, unemployment benefits, and other parts of the social security system.
Unlike income tax, NI contributions also build your entitlement to certain benefits — most importantly, the State Pension. Your NI record tracks the qualifying years you’ve built up over your working life.
You receive a National Insurance number automatically before your 16th birthday if you live in the UK. It’s used to track your contributions throughout your career.
National Insurance Classes Explained
There are four main classes of NI, each applying to different types of worker:
| Class | Who Pays | Rate (2025/26) | Details |
|---|---|---|---|
| Class 1 | Employees | 8% on £12,570–£50,270; 2% above £50,270 | Deducted automatically through PAYE. Employer pays 13.8% on earnings above £9,100 |
| Class 2 | Self-employed | £3.45 per week | Paid if profits exceed £12,570. Collected through Self Assessment |
| Class 3 | Voluntary | £17.45 per week | Paid voluntarily to fill gaps in your NI record |
| Class 4 | Self-employed | 6% on £12,570–£50,270; 2% above £50,270 | Paid on profits through Self Assessment alongside Class 2 |
Most employees only need to think about Class 1 — it’s handled automatically by your employer through PAYE. If you’re self-employed, you’ll pay both Class 2 and Class 4 through your Self Assessment tax return.
National Insurance Thresholds 2025/26
Several thresholds determine when you start paying and at what rate:
| Threshold | Annual Amount | Weekly Amount | Purpose |
|---|---|---|---|
| Lower Earnings Limit (LEL) | £6,396 | £123 | Earnings above this count towards your NI record (even if you don’t pay NI) |
| Primary Threshold (PT) | £12,570 | £242 | You start paying employee NI above this amount |
| Upper Earnings Limit (UEL) | £50,270 | £967 | Rate drops from 8% to 2% above this amount |
| Secondary Threshold (ST) | £9,100 | £175 | Employers start paying NI on your earnings above this |
The Primary Threshold has been aligned with the income tax personal allowance at £12,570 since 2022, meaning you start paying both income tax and NI at roughly the same point.
How NI Builds Your State Pension
Your NI contributions directly determine your State Pension entitlement:
- You need 35 qualifying years for the full new State Pension (£221.20 per week in 2025/26)
- You need a minimum of 10 qualifying years to receive any State Pension
- A qualifying year means you earned above the Lower Earnings Limit (£6,396) or received NI credits
If you have fewer than 35 years, your pension is calculated proportionally. For example, 28 qualifying years would give you 28/35ths of the full amount.
How to Check Your NI Record
You can check your National Insurance record online through your Personal Tax Account on gov.uk. You’ll need a Government Gateway or GOV.UK One Login account.
Your record shows:
- How many qualifying years you have
- Any gaps in your record
- Whether you can fill those gaps with voluntary contributions
- A forecast of your State Pension
It’s worth checking every few years, especially as you approach retirement age, to ensure your record is accurate and complete.
NI Gaps and Voluntary Contributions
If you have gaps in your NI record — perhaps from time spent abroad, not working, or earning below the threshold — you can fill them by paying voluntary Class 3 contributions at £17.45 per week.
This can be excellent value. Paying roughly £907 for a single year could increase your annual State Pension by around £328 — a return you’d struggle to beat with any other investment.
Important deadline: The government extended the deadline to fill gaps going back to April 2006, but this window is closing. If you have pre-2016 gaps, check gov.uk urgently to see if filling them would boost your pension.
Not everyone needs to pay voluntarily. You may already have 35 years, or you may receive NI credits automatically if you’re claiming certain benefits, caring for a child under 12, or registered as a carer.
NI and Employment Types
Your NI obligations differ depending on how you work:
Employees pay Class 1 NI, deducted automatically by the employer through PAYE. This is the simplest arrangement — you don’t need to do anything.
Self-employed workers pay Class 2 and Class 4 NI through their annual Self Assessment tax return. Total NI is typically lower than for an employee on the same income. See our self-employment tax guide for more detail.
Company directors have special NI rules. Rather than calculating NI each pay period, HMRC uses an annual earnings period. This can affect when NI is deducted if you pay yourself irregularly.
You can use our take-home pay calculator to see exactly how much NI you’ll pay on your salary.
NI After State Pension Age
Once you reach State Pension age, you stop paying National Insurance entirely — even if you continue working. This effectively gives you a pay rise, as 8% (or more) is no longer deducted from your earnings.
Your employer also stops paying employer NI on your earnings once you reach State Pension age, which can make older workers slightly cheaper to employ.
You’ll still pay income tax on earnings above the personal allowance, but the NI saving can be significant — especially for higher earners.
Key Takeaways
- NI funds the State Pension and NHS — and builds your personal pension entitlement
- Employees pay 8% on earnings between £12,570 and £50,270, plus 2% above that
- You need 35 qualifying years for a full State Pension
- Check your NI record on gov.uk and fill any gaps before the deadline closes
- You stop paying NI once you reach State Pension age