How much National Insurance do I pay?

National Insurance Contributions (NICs) contribute to a state fund, which pays for  benefits including the state pension as well as some funding for the NHS. The amount of NICs you pay depends on how you work (employed or self-employed) as well as how much you earn. Employers also have to pay NICs on employees’ wages - you can find out more in our guide to what NI employers pay.

How is NIC calculated if I am employed? 

As a full or part-time employee, you will have a National Insurance category letter which your employer will use for their payroll. Your employer uses this to calculate how much both you and they need to contribute. Most employees are category A. However, there are additional categories that you could be in depending on your individual situation.

NICs categories

• Category B – Married working women and widows who elected to pay reduced NICs. You must have been born before April 1966 and opted in before 1977.
• Category C – Employees over the current State Pension age. 
• Category H – Apprentices under 25. 
• Category J – Employees who defer paying NICs because they are paying it through another job.
• Category M – Employees under 21. 
• Category V – Employees working in their first job since leaving the armed forces i.e. veterans.
• Category Z – Employees under 21 who can defer NICs because they are paying it through another job. 

In addition, there are different ‘classes’ of NICs that you must pay, depending on how you earn your income: 

NICS classes

• Class 1 NICs – All employees pay primary Class 1 NICs. This is taken from your pre-tax income and paid over to HMRC on your behalf by your employer. Employers must also pay secondary Class 1 NICs based on your earnings. 
• Class 2 NICs – Paid on behalf of most self-employed people (if you earn £7,105 or more for 2026/27) and you can choose to pay Class 2 NICs voluntarily if you earn less than this to build up your NICs record to receive a full state pension in retirement. Class 2 NICs are £3.65 per week for the 2026/27 tax year. 
• Class 3 NICs – Can be paid voluntarily if you are not working, not claiming benefits and not getting NICs credits otherwise. If you have lived abroad, you can also pay Class 3 NICs to preserve your rights to certain state benefits. This costs £18.40 a week in the 2026/26 tax year. 
• Class 4 NICs – Paid by self-employed professionals if your profits are over £12,570 for the 2026/27 tax year. You pay Class 4 NICs at 6% on profits between t£12,570 and £50,270 and2% on profits above £50,270

What are the NICs thresholds? 

Class 1 NICs have various thresholds which apply to either employee or employer.

Employees only pay NICs on earnings above the Primary Threshold, but you get NICs credit (towards the state pension and contributory benefits) if you earn above the Lower Earnings Limit. Employers pay NICs on most employees’ earnings above the Secondary Threshold, but see the HMRC explanation of the other thresholds here. 

Class 1 NIC thresholds	Monthly	Weekly
Lower Earnings Limit	£529	£123
Primary Threshold	£1,048	£242
Secondary Threshold	£417	£175
Upper Earnings Limit	£4,189	£967
Upper Secondary Threshold	£4,189	£967
Apprentice Upper Secondary Threshold	£4,189	£967
Freeports Upper Secondary Threshold	£2,083
Investment Zones Upper Secondary Threshold	£2,083
Veterans Upper Secondary Threshold	£4,189

What Class 1 NICs rates do employees pay? 

The rate of Class 1 NICs you pay is deducted from your pay between the relevant thresholds.  

The Government announces annual changes to NICs rates and thresholds each year in the Budget and they usually change at the start of the tax year. 

From 6th April 2026 to 5th April 2027 

Income (monthly)	Class 1 NIC rate
£1,048 - £4,189	8%
Above £4,189	2%

How much NICs does my employer pay? 

How much an employer pays in Class 1 NICs depends on their employees’ salary, NICs category letter and relevant threshold but the standard threshold and rate are:  

Income (monthly)	Class 1 (secondary) NIC rate
Above £417	15%

Employers can use the Employment Allowance to lower their NICs bill by up to £10,500 per year. All employees under the age of 21 and apprentices under the age of 25 are exempt from employer Class 1 NICs, unless they earn more than £4,189 a month.  

If you're hiring staff for the first time, can assist you in navigating employment laws and ensuring compliance – see our article here.  

How much NICs do I pay if I am self-employed? 

Class 4 NICs 

The main class of NICs for self-employed people is Class 4. You will pay 6% on annual earnings between £12,570 and £50,270 and a lower 2% rate on earnings above £50,270 (2026/27 rates). 

Class 2 NICs 

If your self-employed profits are £7,105 or more annually, you will be treated as having paid Class 2 NICs to protect your National Insurance record. You do not have to make any Class 2 NIC payments.  

If your profits are less than £7,105, you can choose to make voluntary Class 2 NIC payments. Class 2 NICs are £3.65 per week (2026/27 rate). 

What if I have a job AND my own business? 

If you are employed and self-employed, you will pay:  

• Class 1 NICs on your employed income  
• Class 4 NICs on your self-employed income if your profits are over £12,570 a year. You should file a self-assessment tax return to declare your earnings from self-employment and employment, and Class 4 NICs is paid this way.

What are voluntary NICs contributions? 

There are some professions who may opt to pay voluntary Class 2 NICs.  Religious ministers, exam invigilators, investors and property business owners are exempt from Class 2 NICs, but these individuals may not qualify for contributory benefits or the full state pension if they do not make sufficient contributions.  

If you have lived abroad and haven’t got a full NICs record you may be able to pay voluntary Class 2 or Class 3 NICs. Speak to your accountant about which voluntary contributions you can pay, as it depends on which tax years you do not have NICs credit for.  

Have I paid too much NICS? 

You can overpay NICs. Some examples are: 

• you have continued to pay NICs after reaching the state pension age 
• you have multiple jobs 
• you have employment and self-employment, and have a high income   

Fortunately, it is easy to claim NICs rebates. You can check your NICs record on the HMRC app or GOV.UK and you can claim refunds for all four classes of NICs, using the GOV.UK website’s intuitive tool. 

How TaxAssist Accountants can help 

If you require clarification on your National Insurance or tax position, at TaxAssist Accountants Waterloo we will be happy to help. We can go through your self-employed and/or employed income to determine the appropriate NICs rates for you and discuss your NICs record.. For a free initial consultation, call our friendly and experienced team today on 020 7401 8384 or use our online enquiry form. 

Last updated: 23rd April 2026