What is it for?
National Insurance (NI) pays for the State Pension and some benefits, such as New Style Jobseeker’s Allowance and Employment and Support Allowance. Each year you pay it, or get NI credits, counts towards your State Pension.
It’s separate from Income Tax, with its own rates and limits.
How much do employees pay?
Employees pay Class 1 National Insurance, taken from each payslip:
| Earnings a year | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,570 to £50,270 | 8% |
| Over £50,270 | 2% |
| Slice of income | Rate | Amount due |
|---|---|---|
| First £12,570 | 0% | £0.00 |
| Next £37,700 | 8% | £3,016.00 |
| The last £9,730 | 2% | £194.60 |
| National Insurance for the year | £3,210.60 | |
| Salary | National Insurance a year |
|---|---|
| £25,000 | £994.40 |
| £30,000 | £1,394.40 |
| £45,000 | £2,594.40 |
| £60,000 | £3,210.60 |
It’s worked out on each payslip
Income Tax looks at the whole year so far. National Insurance doesn’t: it’s worked out on each pay period on its own. If you’re paid monthly, you pay 8% on earnings between £1,048 and £4,189 that month, and 2% above.
So a month with a big bonus can mean less NI than you’d expect, because more of it falls in the 2% band. And a month of low pay can mean no NI at all, even if you earn more later in the year.
What your employer pays
Your employer pays 15% on your earnings over £5,000 a year, on top of your salary. It isn’t taken from your pay, but it’s part of what you cost them.
If you’re self-employed
- Class 4: 6% on profits between £12,570 and £50,270, and 2% above, paid with your Income Tax through Self Assessment. On £30,000 of profit, that’s £1,045.80.
- Class 2: no longer charged. If your profits are over £7,105, you get NI credits for the year automatically. Below that, you can pay £3.65 a week voluntarily to protect your State Pension.
With a job as well, your total NI is capped. The Class 1 you pay on your salary uses up part of the 6% band, so more of your profit is charged at 2%. With a salary over about £40,845, all your Class 4 is at 2%. Self Assessment may charge the full amount at first: you can apply to defer it, or HMRC refunds the difference after the tax year.
The self-employed tax calculator works this out for you.
When do you stop paying?
Employees stop paying NI once they reach State Pension age, even if they keep working. Your employer still pays its share. If you’re self-employed, Class 4 stops from the tax year after you reach State Pension age.
National Insurance and your State Pension
You need 35 qualifying years on your NI record for the full new State Pension (£241.30 a week in 2026/27), and at least 10 to get any. A year counts if you paid NI, or got NI credits, for example while claiming Child Benefit for a child under 12 or some other benefits.
You can check your NI record and fill gaps from past years on GOV.UK.
Paying less National Insurance
Salary sacrifice is the main way. Pension contributions, cycle-to-work schemes and some other benefits paid this way come out of your pay before NI, saving you 8% (or 2% above £50,270). Pension contributions made through net pay or relief at source get tax relief, but not NI relief.
If your income is close to £100,000, salary sacrifice also helps you avoid the 60% tax trap.
See your own numbers
The salary calculator shows your NI, Income Tax and take-home pay for any salary and pay frequency.