Tax information is based on HMRC rules for the 2026/27 tax year. Tax rules can change — always verify current rates at GOV.UK. This is not tax advice. Consider consulting a qualified tax adviser for your personal situation.
Contents
National Insurance is separate from Income Tax but just as important. Here’s everything you need to know.
For the wider cluster covering rates, credits, employer costs and records, use the main National Insurance hub.
Read more: See our Take Home Pay guide for a complete overview of this topic.
What Is National Insurance?
The Basics
Feature
Details
What it is
A tax on earnings
What it funds
State Pension, NHS, benefits
Who pays
Employees, employers, self-employed
Builds
Entitlement to State Pension and benefits
Stops
At State Pension age
Difference from Income Tax
Feature
Income Tax
National Insurance
What it funds
General government spending
Specific benefits
Builds entitlement
No
Yes (pension, benefits)
Stops at pension age
No
Yes
Rate structure
Progressive bands
Lower/upper earnings limits
NI Rates (2026/27)
Employees (Class 1)
Earnings
Rate
Below £242/week (£12,570/year)
0%
£242-£967/week (£12,570-£50,270/year)
8%
Above £967/week (£50,270/year)
2%
Employers (Class 1)
Earnings
Rate
Below £96/week (£5,000/year)
0%
Above £96/week
15%
Self-Employed
Type
Rate
Class 2
Abolished as compulsory from April 2024 — voluntary £3.65/week if profits are below the Small Profits Threshold (£7,105 for 2026/27)
Class 4 (£12,570-£50,270)
6%
Class 4 (above £50,270)
2%
Example Calculations
Employee Earning £30,000
Component
Calculation
Amount
Below threshold
£12,570 × 0%
£0
Main rate
£17,430 × 8%
£1,394
Total NI
—
£1,394/year
Employee Earning £60,000
Component
Calculation
Amount
Below threshold
£12,570 × 0%
£0
Main rate
£37,700 × 8%
£3,016
Upper rate
£9,730 × 2%
£195
Total NI
—
£3,211/year
Self-Employed Earning £40,000
Type
Calculation
Amount
Class 2
Not payable (profits above Small Profits Threshold — automatic qualifying year)
£0
Class 4 (main)
£27,430 × 6%
£1,646
Total NI
—
£1,646/year
NI Classes Explained
Summary of Classes
Class
Who Pays
Purpose
Class 1
Employees
Builds full entitlement
Class 2
Self-employed
Builds entitlement
Class 3
Voluntary
Fill gaps for State Pension
Class 4
Self-employed
Tax on profits
Class 1 (Employees)
Feature
Details
Deducted
From wages automatically
Employer pays
Additional amount
Builds
State Pension, JSA, ESA, Maternity
Class 2 (Self-Employed)
Feature
Details
Amount
Abolished as compulsory from April 2024; £3.65/week if paid voluntarily
If profit above £7,105 (Small Profits Threshold)
Automatic qualifying year — no payment needed
Builds
State Pension, Maternity, Bereavement (voluntary payment or automatic credit)
Class 4 (Self-Employed)
Feature
Details
On profits
6% main rate, 2% upper
Doesn’t build
Entitlement (just a tax)
Paid via
Self Assessment
Class 3 (Voluntary)
Feature
Details
Amount
£17.45/week (2024-25)
Purpose
Fill gaps in record
Builds
State Pension only
When to pay
If record has gaps
NI and State Pension
Qualifying Years
Requirement
Details
Full State Pension
35 qualifying years
Minimum State Pension
10 qualifying years
Qualifying year
Earn above £6,708 or pay voluntarily
Checking Your Record
How
Details
Online
gov.uk “Check your State Pension”
See
Years contributed
Forecast
Future pension amount
Gaps
Years missing
Filling Gaps
Option
Details
Class 3 voluntary
£18.40/week
Deadline
Usually 6 years (check for extensions)
NI Credits
If eligible (caring, unemployment)
Worth it?
Often yes — increases pension significantly
NI Credits
Free Credits (No Payment Needed)
Situation
Credit Received
Claiming Jobseeker’s Allowance
Yes
Claiming ESA
Yes
Child Benefit (child under 12)
Yes
Caring (20+ hours/week)
Yes
Foster caring
Yes
Jury service
Yes
Example: Child Benefit
Feature
Details
If you claim Child Benefit
Get NI credit automatically
If child under 12
Years count toward pension
If not working
Still builds record
If earning below threshold
Credit tops it up
When NI Stops
State Pension Age
Feature
Details
When you reach
State Pension age
Employee NI
Stops
Employer NI
Also stops
Income Tax
Continues
Working past pension age
More tax-efficient
Benefits of Working Past Pension Age
Element
Under Pension Age
Over Pension Age
Income Tax
Normal rates
Normal rates
Employee NI
8%/2%
0%
Take home
Lower
Higher
Salary Sacrifice and NI
How It Saves NI
Situation
What Happens
Normal contribution
NI paid, then pension contribution
Salary sacrifice
Salary reduced, no NI on that portion
You save
8% NI on contribution amount
Employer saves
15% NI (may share with you)
Example
£500/month Pension Contribution
Normal
Salary Sacrifice
Your gross salary
£3,000
£2,500
Pension contribution
£500
£500 (via sacrifice)
NI (employee 8%)
£240
£200
NI saving
—
£40/month
Summary: NI Key Points
Rates to Remember (2026/27)
Type
Rate
Employees (£12,570-£50,270)
8%
Employees (above £50,270)
2%
Self-employed Class 4 (main)
6%
Self-employed Class 4 (upper)
2%
Class 2 (voluntary only, since April 2024)
£3.65/week
Class 3 (voluntary)
£18.40/week
Key Actions
Action
Why
Check State Pension forecast
Know what you’ll get
Check for gaps
May need to fill
Consider voluntary contributions
If gaps affect pension
Claim Child Benefit
Even if repaid (for NI credit)
Consider salary sacrifice
Save NI
Who Gets NI Credits
Situation
Credit
Child Benefit claimant (child under 12)
✓
Jobseeker’s Allowance
✓
ESA
✓
Carer’s Allowance
✓
Caring 20+ hours
✓
Grandparent childcare transfer
✓
National Insurance isn’t just a tax — it builds your entitlement to State Pension and benefits. Check your record and fill gaps if needed.