Last updated: 14 October 2026
What is National Insurance, and how much do you pay?
National Insurance contributions (NICs) are a tax on earnings that builds your entitlement to the State Pension and some benefits. Employees pay Class 1 NIC at 8% on earnings between £12,570 and £50,270 a year and 2% above that. Employers pay 15% above £5,000. Self-employed people pay Class 4 NIC at 6% on profits between £12,570 and £50,270 and 2% above. Class 2 is no longer compulsory, and Class 3 is voluntary, at £18.40 a week for 2026/27.
The classes of National Insurance
| Class | Who pays | 2026/27 rate |
| Class 1 primary | Employees | 8% between £12,570 and £50,270; 2% above |
| Class 1 secondary | Employers | 15% above £5,000 |
| Class 1A | Employers, on most benefits in kind | 15% |
| Class 2 | Self-employed (voluntary) | Paid voluntarily to protect State Pension if profits are low |
| Class 3 | Anyone filling gaps in their record | £18.40 a week |
| Class 4 | Self-employed | 6% between £12,570 and £50,270; 2% above |
What NIC pays for
Your record determines your State Pension. You need 35 qualifying years for the full new State Pension (£241.30 a week in 2026/27) and at least 10 years to get any. NICs also count towards contribution-based Jobseeker’s Allowance, Employment and Support Allowance, and Maternity Allowance.
Example
Tom earns a salary of £40,000.
- His NIC: (£40,000 − £12,570) × 8% = £2,194.40
- His employer’s NIC: (£40,000 − £5,000) × 15% = £5,250
A self-employed person with £40,000 of profit pays Class 4 of (£40,000 − £12,570) × 6% = £1,645.80.
Who doesn’t pay
- People under 16
- People over State Pension age (on earnings; employers still pay)
- Employees earning under £242 a week (the primary threshold), though weeks between £129 and £242 still count for the State Pension
Employer reliefs
Employers can claim the Employment Allowance of up to £10,500 a year to reduce their NIC bill, unless they’re a single-director company with no other employees. Employer NIC is 0% up to £50,270 for employees under 21, apprentices under 25, and some veterans.
Checking your record
Check your National Insurance record in the HMRC app or your personal tax account. You can usually pay voluntary contributions to fill gaps from the last 6 years. Check whether it’s worth it before you pay.
Directors
Company directors have an annual earnings period for NIC, so contributions are worked out on total pay for the tax year, not on each payday. Payroll software handles this automatically.
National Insurance and salary sacrifice
Salary sacrifice for pensions currently saves both employee and employer NIC. From 6 April 2029, only the first £2,000 a year sacrificed into a pension will be NIC-free. Other salary sacrifice schemes, such as cycle to work, have their own rules, and many benefits still carry Class 1A NIC for the employer.
Frequently asked questions
Do I need a National Insurance number to work?
You can start work, but you should apply for one.
Do pensioners pay NIC?
Not on earnings after State Pension age.
Is NIC due on dividends?
No.
Can I claim back overpaid NIC?
Yes, if you had two jobs or deductions after State Pension age.
Related: registering for National Insurance and Class 2 after State Pension age.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with National Insurance. See our personal tax accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
