Self-employed people in the UK normally pay Class 4 National Insurance when their annual taxable profits exceed £12,570. For the 2026/27 tax year, the Class 4 rate is 6% on profits between £12,570 and £50,270, followed by 2% on profits above £50,270.
Most self-employed people no longer have to make compulsory Class 2 payments. Where annual profits are at least £7,105, Class 2 contributions are treated as having been paid, helping to protect the person’s National Insurance record without an actual Class 2 charge.
Someone with profits below £7,105 does not have to pay National Insurance, but may choose to make voluntary Class 2 NI contributions at £3.65 per week for 2026/27.
What Are the Self-Employed National Insurance Rates for 2026/27?
The following table provides a direct summary of the current national insurance rates for self employed workers.
| Annual self-employed profit | Class 2 treatment | Class 4 treatment |
| Less than £7,105 | Nothing due, but voluntary Class 2 is available at £3.65 a week | Nothing due |
| £7,105 to £12,570 | Treated as paid without an actual charge | Nothing due |
| More than £12,570 to £50,270 | Treated as paid without an actual charge | 6% on profits above £12,570 |
| More than £50,270 | Treated as paid without an actual charge | 6% between £12,570 and £50,270, plus 2% above £50,270 |
These thresholds apply from 6 April 2026 to 5 April 2027. National Insurance is calculated using taxable business profit, not the total amount received from customers.
What Are National Insurance Contributions for Self-Employed People?
National Insurance contributions are payments connected to earnings and profits. They help fund certain state benefits and the State Pension, although different National Insurance classes have different functions.
The main forms of self employed NI contributions are:
- Class 2 National Insurance, which can protect entitlement to the State Pension and certain contributory benefits
- Class 4 National Insurance, which is a tax-like charge on self-employed profits above the Lower Profits Limit
Class 1 National Insurance generally applies to employees. A person who owns and works through a limited company may be treated as an employee of the company rather than self-employed for National Insurance purposes.
Anyone uncertain about their business structure may need to compare operating as a sole trader with running a limited company before applying the self-employed rules.
What Are the Current NI Contribution Rates?
The confirmed NI contribution rates for self-employed people in the 2026/27 tax year are:
| Contribution | 2026/27 rate or threshold |
| Small Profits Threshold | £7,105 a year |
| Voluntary Class 2 rate | £3.65 a week |
| Class 4 Lower Profits Limit | £12,570 a year |
| Class 4 Upper Profits Limit | £50,270 a year |
| Main Class 4 rate | 6% |
| Additional Class 4 rate | 2% |
The main 6% rate applies only to the portion of taxable profit between £12,570 and £50,270. The 2% rate applies only to the portion above £50,270.
It is therefore incorrect to multiply a person’s entire annual profit by 6%.
The official self-employed National Insurance rates are published by HM Revenue and Customs and should be checked whenever a new tax year begins.
How Do Class 2 NI Contributions Work?
The requirement for most self-employed people to pay compulsory Class 2 National Insurance was removed from 6 April 2024.
However, statements that Class 2 has been completely abolished are misleading. Class 2 still exists for voluntary payments and certain special categories.
The rules for 2026/27 are based on three situations.
Profits Below £7,105
A person with annual profits below £7,105 does not have to pay Class 2 or Class 4 National Insurance.
They may, however, choose to pay voluntary Class 2 contributions at £3.65 per week. Paying for a full 52-week period would cost approximately £189.80, although the actual amount can differ where only part of the year is payable.
Voluntary payments may help prevent a gap in the person’s National Insurance record.
They should first check their National Insurance record and State Pension forecast. Voluntary contributions do not always increase the State Pension, so paying without checking could result in an unnecessary expense.
Profits Between £7,105 and £12,570
Where profits are at least £7,105 but no more than £12,570:
- No Class 2 payment is collected
- Class 2 is treated as having been paid
- No Class 4 contribution is due
- The year can still help protect the person’s National Insurance record
This is sometimes described as receiving a National Insurance credit or having Class 2 treated as paid.
Profits Above £12,570
Where profits exceed £12,570:
- Class 2 continues to be treated as paid
- No separate compulsory Class 2 charge is collected
- Class 4 National Insurance becomes payable
The removal of compulsory Class 2 payments does not mean profitable sole traders no longer pay National Insurance. They continue to pay Class 4 contributions where their profits exceed the relevant threshold.
What Is National Insurance Class 4?
National Insurance Class 4 is the main compulsory National Insurance charge for self-employed people with profits above the Lower Profits Limit.
For 2026/27, the calculation is:
- 0% on profits up to £12,570
- 6% on profits between £12,570 and £50,270
- 2% on profits above £50,270
Class 4 contributions are collected with Income Tax through Self Assessment.
Unlike Class 2, Class 4 contributions do not themselves count towards the State Pension or other contributory benefits. They are still legally payable where the profit threshold is exceeded.
How Are Class 4 NI Contributions Calculated?
The basic Class 4 calculation can be divided into two bands.
Profits Between £12,570 and £50,270
Use the following formula:
Taxable profit minus £12,570 × 6%
For example, someone with a taxable profit of £30,000 would calculate:
£30,000 − £12,570 = £17,430
£17,430 × 6% = £1,045.80
The Class 4 National Insurance bill would be £1,045.80.
Profits Above £50,270
Where profit exceeds £50,270, the calculation has two parts:
- Apply 6% to the £37,700 between £12,570 and £50,270.
- Apply 2% to the amount above £50,270.
The maximum amount charged at 6% is:
£37,700 × 6% = £2,262
The 2% rate is then added to profits above £50,270.
How Much Class 4 National Insurance Would Different Profits Produce?
The following examples assume one sole-trader business, no unusual National Insurance adjustments and taxable profits for the full 2026/27 tax year.
| Annual taxable profit | Class 4 calculation | Estimated Class 4 bill |
| £5,000 | Below £12,570 | £0 |
| £10,000 | Below £12,570 | £0 |
| £12,570 | No profit above the threshold | £0 |
| £20,000 | £7,430 × 6% | £445.80 |
| £30,000 | £17,430 × 6% | £1,045.80 |
| £50,270 | £37,700 × 6% | £2,262.00 |
| £60,000 | £2,262 plus £9,730 × 2% | £2,456.60 |
| £80,000 | £2,262 plus £29,730 × 2% | £2,856.60 |
| £100,000 | £2,262 plus £49,730 × 2% | £3,256.60 |
These figures cover Class 4 contributions only. They do not include Income Tax, student loan repayments, Capital Gains Tax, voluntary Class 2 payments or payments on account.
A person can use HMRC’s Self Assessment tax bill estimator for a broader estimate, although the service may not cover every personal circumstance.
Is Self-Employed National Insurance Based on Turnover or Profit?
Self-employed National Insurance is generally based on taxable profit, not turnover.
Turnover is the total business income received before expenses. Taxable profit is normally calculated by deducting allowable business expenses and any relevant adjustments from business income.
For example:
| Business calculation | Amount |
| Annual turnover | £45,000 |
| Allowable business expenses | £15,000 |
| Taxable business profit | £30,000 |
| Estimated Class 4 National Insurance | £1,045.80 |
The Class 4 calculation is based on the £30,000 profit rather than the £45,000 turnover.
HMRC allows qualifying business costs to be deducted when working out taxable profit. These may include office costs, business travel, stock, staff costs, insurance, advertising and certain premises expenses.
Further information can be provided in a related explanation of allowable expenses for self-employed workers.
Does the £1,000 Trading Allowance Affect National Insurance?
A person with gross trading income of no more than £1,000 may be covered by the trading allowance and may not need to register for Self Assessment solely because of that income.
Where gross trading income exceeds £1,000, the person may be able to deduct either:
- Actual allowable business expenses, or
- The £1,000 trading allowance
They cannot normally use both against the same trading income.
The resulting taxable profit can affect whether Class 4 National Insurance is payable. However, the rules can be more complicated where there are multiple businesses, partnership income, losses or other taxable income.
A separate guide to the self-employed trading allowance can explain when registration and reporting are required.
Is National Insurance Separate From Income Tax?
Yes. Income Tax and National Insurance are separate liabilities, even though both are normally calculated through the same Self Assessment return.
A sole trader may have to pay:
- Income Tax on taxable income
- Class 4 National Insurance on qualifying self-employed profits
- Voluntary Class 2 contributions where appropriate
- Student loan or postgraduate loan repayments
- Payments on account towards the following year
Being below the Income Tax Personal Allowance does not automatically settle every National Insurance issue. The relevant National Insurance profit thresholds must be considered separately.
For 2026/27, the Class 4 Lower Profits Limit and the standard Personal Allowance are both £12,570, but they remain separate tax concepts.
How Is National Insurance Paid When Self Employed?
For people researching national insurance when self employed, the usual payment method is Self Assessment.
The sole trader reports business income, allowable expenses and taxable profit on a tax return. HMRC then calculates the Income Tax and Class 4 National Insurance due.
Most voluntary Class 2 payments can also be handled through Self Assessment, although separate arrangements may be required in some circumstances.
A person starting to trade should follow the official process to register as a sole trader and obtain a Unique Taxpayer Reference where needed.
A detailed internal explanation of how to register as self-employed with HMRC can help new business owners complete the process correctly.
What Are the Self Assessment Deadlines for Self-Employed Workers?
For the 2026/27 tax year, which ends on 5 April 2027, the normal Self Assessment timeline is expected to be:
| Requirement | Normal deadline |
| Register for Self Assessment if newly required | 5 October 2027 |
| Submit a paper tax return | 31 October 2027 |
| Submit an online tax return | 31 January 2028 |
| Pay the balancing Income Tax and National Insurance bill | 31 January 2028 |
| First payment on account for 2027/28 | 31 January 2028 |
| Second payment on account for 2027/28 | 31 July 2028 |
These dates apply the standard annual Self Assessment timetable to the tax year ending 5 April 2027. HMRC should be checked before filing because individual notices, exceptional circumstances or legislative changes can affect a deadline.
For comparison, returns for the tax year ending 5 April 2026 must normally be submitted online and paid by 31 January 2027.
More detail can be included in a dedicated Self Assessment deadlines guide.
Do Payments on Account Include Class 4 National Insurance?
Yes. Payments on account can include both:
- Income Tax
- Class 4 National Insurance
They are advance payments towards the following year’s Self Assessment bill. Each payment is usually half of the previous year’s qualifying liability and is due on 31 January and 31 July.
For example, suppose the relevant Income Tax and Class 4 bill for 2026/27 is £6,000. The person may have to pay:
| Payment | Potential amount |
| 2026/27 balancing payment on 31 January 2028 | £6,000 |
| First payment on account for 2027/28 | £3,000 |
| Second payment on account on 31 July 2028 | £3,000 |
This can make the first substantial Self Assessment payment much larger than expected.
Payments on account are generally required unless the relevant bill is below £1,000 or enough tax was already collected outside Self Assessment. Voluntary Class 2 contributions are not included in payments on account in the same way as Class 4.
Anyone facing a first large bill should read about how Self Assessment payments on account work.
What Changed With Class 2 National Insurance?
Before 6 April 2024, many self-employed people paid a fixed weekly Class 2 contribution when their profits exceeded the relevant threshold.
From 6 April 2024, the government removed the requirement for most self-employed people with sufficient profits to pay compulsory Class 2 contributions.
Under the current system:
- Profits of at least the Small Profits Threshold can protect the National Insurance record without a Class 2 payment
- Class 4 remains payable above £12,570
- People below the Small Profits Threshold may still make voluntary Class 2 payments
- Certain occupations and special cases can have different rules
The confirmed change was the removal of the compulsory payment requirement. It was not the complete deletion of Class 2 from the National Insurance system.
Does Class 4 National Insurance Increase the State Pension?
No. Class 4 contributions do not directly create entitlement to the State Pension or contributory benefits.
A self-employed person’s qualifying record is normally protected through Class 2 contributions that are:
- Treated as paid because profits reach the Small Profits Threshold, or
- Paid voluntarily where profits are below that threshold
This distinction is important. Paying a large Class 4 bill does not provide a larger State Pension than paying a smaller Class 4 bill.
The State Pension depends on the person’s overall National Insurance record, qualifying years and individual circumstances.
Before making voluntary contributions, the person should check their State Pension forecast and whether an additional payment would improve the eventual pension.
Should Someone With Low Profits Pay Voluntary Class 2?
Someone with profits below £7,105 may consider voluntary Class 2 contributions where they would otherwise have a gap in their record.
However, voluntary payment should not be automatic.
The person should first check:
- Whether the year already qualifies through employment
- Whether National Insurance credits apply
- Whether they already have enough qualifying years
- Whether paying will increase their State Pension
- Whether another type of voluntary contribution is required
- Whether they are eligible to pay Class 2 for that period
The official voluntary National Insurance service can show whether gaps exist and whether paying may be beneficial.
Professional or government guidance may be appropriate where the person has lived abroad, reached State Pension age, been contracted out or has a complicated contribution history.
What Happens if Someone Is Employed and Self-Employed?
A person can be both employed and self-employed during the same tax year.
They may pay:
- Class 1 National Insurance through PAYE on employment earnings
- Class 4 National Insurance through Self Assessment on self-employed profits
The employer deducts Class 1 from wages. The individual reports their business profit through Self Assessment.
National Insurance has annual maximum and interaction rules intended to prevent excessive contributions in some circumstances. HMRC normally calculates the final amount after the return is submitted and may adjust or refund contributions where necessary.
Someone with employment income and profits below £7,105 should check whether their Class 1 record already provides a qualifying year before voluntarily paying Class 2.
Do Limited Company Directors Pay Class 4 National Insurance?
A limited company is legally separate from its owner. A director is not normally treated as self-employed merely because they own and manage the company.
A director receiving a salary through the company normally falls under PAYE and Class 1 National Insurance rules.
Class 4 National Insurance generally applies to profits from a sole trade, profession or individual partnership rather than company profits.
A director may still owe Class 4 contributions where they also operate a separate sole-trader business.
HMRC confirms that someone running a limited company is not classed as self-employed for the purpose of the standard sole-trader expense rules, even where they are the company’s owner and only employee.
Do Business Partnerships Pay Self-Employed National Insurance?
Individual members of an ordinary business partnership are generally self-employed.
Each partner normally pays Income Tax and Class 4 National Insurance on their individual share of the partnership’s taxable profit, rather than on the partnership’s total profit.
For example:
| Partnership position | Amount |
| Total partnership taxable profit | £80,000 |
| Two partners sharing profits equally | £40,000 each |
| Profit used for each partner’s Class 4 calculation | £40,000 |
Each partner would calculate Class 4 using their £40,000 share, subject to their personal circumstances and any other self-employed profits.
Different rules can apply to limited liability partnerships, salaried members and corporate partners.
What Happens After Reaching State Pension Age?
A self-employed person generally stops paying Class 4 National Insurance from the start of the tax year after reaching State Pension age.
For example, someone who reaches State Pension age during the 2026/27 tax year will usually remain liable for Class 4 for that tax year. Their Class 4 liability would then stop from 6 April 2027.
They may still need to submit Self Assessment returns and pay Income Tax while continuing to trade.
Class 2 will also no longer be treated as paid after State Pension age.
Are National Insurance Rates Different in Scotland?
National Insurance rates and thresholds generally apply across the United Kingdom, including England, Scotland, Wales and Northern Ireland.
However, Scottish Income Tax bands and rates can differ from those applying in England, Wales and Northern Ireland.
A self-employed person living in Scotland may therefore have the same Class 4 National Insurance calculation as someone elsewhere in the UK but a different Income Tax calculation.
National Insurance and Income Tax should not be treated as one combined percentage.
How Does Making Tax Digital Affect Self-Employed National Insurance?
Making Tax Digital for Income Tax became mandatory from 6 April 2026 for certain sole traders and landlords.
A person generally needs to use Making Tax Digital from 6 April 2026 where their qualifying gross income from self-employment and property was more than £50,000 in the 2024/25 tax year.
The planned timetable is:
| Previous-year qualifying income | MTD starting date |
| More than £50,000 in 2024/25 | 6 April 2026 |
| More than £30,000 in 2025/26 | 6 April 2027 |
| More than £20,000 in 2026/27 | 6 April 2028 |
The MTD threshold is based on qualifying gross income before expenses, not taxable profit. This is different from Class 4 National Insurance, which is based on taxable profit.
People within MTD must generally keep digital records, use compatible software and provide quarterly updates to HMRC. They must still complete the required end-of-year process and pay their tax and National Insurance by the relevant deadline.
More information can be provided in a separate Making Tax Digital for Income Tax guide.
What Records Should a Self-Employed Person Keep?
Accurate records are essential because National Insurance Class 4 is based on taxable profit.
A sole trader should generally retain evidence of:
- Sales and other business income
- Customer invoices
- Business expenses
- Receipts and supplier invoices
- Bank transactions
- Mileage and travel claims
- Equipment purchases
- Grants or business support payments
- Stock and materials
- Partnership profit allocations
- Previous tax returns
- Payments made to HMRC
Records should clearly distinguish business transactions from personal spending.
Poor records can lead to an inaccurate profit calculation, an incorrect National Insurance bill and difficulty supporting expense claims during an HMRC check.
What Are the Most Common Self-Employed NI Mistakes?
Calculating National Insurance From Turnover
Class 4 is generally calculated from taxable profit after allowable expenses, not gross sales.
Applying 6% to the Entire Profit
The first £12,570 is outside the Class 4 charge. Only profit above that figure is included.
Believing Class 2 No Longer Exists
Compulsory Class 2 payments were removed for most self-employed people, but voluntary Class 2 contributions remain available.
Assuming Class 4 Builds State Pension Entitlement
Class 4 contributions do not themselves count towards state benefits or the State Pension.
Ignoring Payments on Account
The January bill can include the previous year’s balance and an advance payment towards the next year.
Confusing a Company Director With a Sole Trader
Company directors normally operate under PAYE and Class 1 rules for salary rather than Class 4 rules on company profits.
Paying Voluntary Contributions Without Checking
Voluntary Class 2 payments do not always increase the eventual State Pension.
Forgetting Making Tax Digital
Some higher-income sole traders have been required to use MTD-compatible software since 6 April 2026.
Which Claims About Self-Employed National Insurance Are Incorrect?
| Claim | Current position |
| “Self-employed people no longer pay National Insurance.” | Incorrect. Class 4 remains payable above £12,570. |
| “Class 2 was completely abolished.” | Misleading. Compulsory payments were removed for most people, but voluntary Class 2 remains. |
| “Class 4 is charged on all turnover.” | Incorrect. It is generally based on taxable profit. |
| “The 6% rate applies to the whole profit.” | Incorrect. It applies only between £12,570 and £50,270. |
| “Class 4 increases the State Pension.” | Incorrect. Class 4 does not itself create benefit entitlement. |
| “A limited company director is automatically self-employed.” | Incorrect. Directors normally follow employment and PAYE rules for salary. |
| “A low-profit sole trader should always pay voluntary Class 2.” | Incorrect. The person should first check whether payment will improve their record. |
What Should a Newly Self-Employed Person Do?
A new sole trader should normally:
- Confirm whether the work is genuinely self-employed.
- Register with HMRC where required.
- Record all business income and allowable expenses.
- Put money aside for Income Tax and Class 4 National Insurance.
- Check whether payments on account may apply.
- Review their National Insurance record.
- Consider voluntary Class 2 only where it is beneficial.
- Check whether Making Tax Digital applies.
- Submit the tax return and payment by the deadline.
- Seek professional advice where the business or contribution record is complex.
A common approach is to move a percentage of every customer payment into a separate tax account. The appropriate percentage depends on profit level, Income Tax band, National Insurance, student loans and other income, so one fixed percentage will not suit everyone.
Conclusion
National Insurance contributions for self-employed people are mainly determined by annual taxable business profit.
For 2026/27:
- Profits below £7,105 create no compulsory National Insurance payment
- Voluntary Class 2 costs £3.65 per week
- Profits of £7,105 or more allow Class 2 to be treated as paid
- Class 4 begins when profit exceeds £12,570
- The main Class 4 rate is 6%
- The rate above £50,270 is 2%
Self-employed workers should calculate National Insurance from profit rather than turnover, prepare for payments on account and check whether Making Tax Digital applies.
Anyone considering voluntary contributions should check their National Insurance record and State Pension forecast before paying. Complicated circumstances involving several jobs, partnerships, overseas work, losses or company income may require advice from HMRC or a qualified tax professional.
Frequently Asked Questions
How much National Insurance does a self-employed person pay?
For 2026/27, a self-employed person pays 6% Class 4 National Insurance on profits between £12,570 and £50,270, followed by 2% on profits above £50,270. No Class 4 is due where profit does not exceed £12,570.
What are the national insurance rates for self employed workers?
The main Class 4 rate is 6%, and the additional rate is 2%. Voluntary Class 2 contributions cost £3.65 per week for 2026/27.
When do self-employed people start paying National Insurance?
Compulsory Class 4 contributions begin when annual taxable profits exceed £12,570. Class 2 is treated as paid where profits are at least £7,105.
Are Class 2 NI contributions compulsory?
Not for most self-employed people. Compulsory Class 2 payments were removed from April 2024. Someone with profits below £7,105 may choose to pay voluntary Class 2.
What are Class 4 NI contributions?
Class 4 NI contributions are percentage-based payments charged on self-employed profits above £12,570. They are normally calculated and collected through Self Assessment.
Does a sole trader pay both Class 2 and Class 4?
A profitable sole trader may have Class 2 treated as paid without an actual charge while paying compulsory Class 4 contributions. A low-profit sole trader may choose to pay voluntary Class 2 without owing Class 4.
Is National Insurance calculated before or after expenses?
Class 4 is generally calculated using taxable profit after allowable business expenses and relevant tax adjustments.
Does the 6% Class 4 rate apply to all profit?
No. It applies only to profit above £12,570 and up to £50,270. Profit above £50,270 is charged at 2%.
How much Class 4 National Insurance is due on £30,000 profit?
The calculation is £30,000 minus £12,570, giving £17,430. Six per cent of £17,430 is £1,045.80.
How much Class 4 National Insurance is due on £60,000 profit?
The first Class 4 band produces £2,262. The £9,730 above £50,270 is charged at 2%, producing £194.60. The total is £2,456.60.
Do self-employed people pay National Insurance monthly?
Class 4 is normally paid through Self Assessment rather than as a fixed monthly deduction. A person can make voluntary budget payments to HMRC or save monthly towards the bill.
Do payments on account include National Insurance?
Payments on account include Class 4 National Insurance and Income Tax. Voluntary Class 2 is not included in the same way.
Does Class 4 National Insurance count towards a State Pension?
No. Class 4 does not itself count towards the State Pension. Class 2 contributions paid, credited or treated as paid can protect the National Insurance record.
Can someone be employed and self-employed at the same time?
Yes. They may pay Class 1 through their employer and Class 4 on self-employed profits. HMRC applies interaction and annual maximum rules where relevant.
Do self-employed pensioners pay National Insurance?
Class 4 generally stops from the start of the tax year after the person reaches State Pension age. Income Tax and Self Assessment obligations may continue.
Are Class 4 contributions an allowable business expense?
Class 4 is calculated after allowable expenses have been deducted from business income. The individual’s own National Insurance bill should not simply be deducted again when calculating the same taxable business profit.
What happens if self-employed profits are lower than expected?
The final Class 4 liability will be based on the taxable profit reported for the year. A person may be able to reduce payments on account where they reasonably expect the next liability to be lower, but interest can apply if the reduction is excessive.
Is National Insurance the same across the UK?
National Insurance rates generally apply across the UK. Income Tax rates can differ for Scottish taxpayers.
Is Making Tax Digital based on profit?
No. MTD qualifying income is generally based on gross self-employment and property income before expenses. Class 4 National Insurance is based on taxable profit.
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