📌 National Insurance Calculator
NI Breakdown
What Is National Insurance?
National Insurance (NI) is a tax on earnings and profits paid by employees, employers, and the self-employed. Unlike income tax, NI contributions are ring-fenced to fund specific state benefits, most importantly the State Pension, as well as Jobseeker's Allowance, Employment and Support Allowance, and Maternity Allowance.
Your NI record — specifically the number of qualifying years you have accumulated — directly determines how much State Pension you will receive. For this reason, National Insurance is widely considered one of the most important financial obligations for working-age adults in the UK.
There are several classes of NI contribution. The most relevant for most people are:
- Class 1: Paid by employees and employers on employment earnings
- Class 2: A flat-rate contribution paid by self-employed people
- Class 3: Voluntary contributions to fill gaps in your NI record
- Class 4: A percentage-based charge on self-employed profits
Employee National Insurance 2025/26
Employees pay Class 1 NI contributions on their earnings above the Primary Threshold of £12,570 per year (£1,047.50 per month / £241.73 per week). No NI is due on earnings below this level.
| Earnings Band | Rate | Notes |
|---|---|---|
| Up to £12,570 | 0% | Below Primary Threshold |
| £12,570 – £50,270 | 8% | Main rate |
| Over £50,270 | 2% | Upper Earnings Limit exceeded |
The employee NI rate was cut from 10% to 8% in April 2024, saving the average employee around £450 per year. For a worker earning £35,000, this means annual employee NI contributions of approximately £1,794.
Employees also build their NI record through employment. As long as your earnings are above the Lower Earnings Limit (£6,396 per year), the year counts as a qualifying year for State Pension purposes, even though no NI is actually deducted below the Primary Threshold.
Employer National Insurance 2025/26
Employers pay secondary Class 1 NI contributions on their employees' earnings. From April 2025, the employer NI rate increased to 15% and the Secondary Threshold (the point at which employer NI kicks in) was reduced from £9,100 to £5,000 per year. This represents one of the largest increases to employer NI costs in recent years.
| Earnings Band | Rate | Notes |
|---|---|---|
| Up to £5,000 | 0% | Below Secondary Threshold |
| Over £5,000 | 15% | Applies on full amount above £5,000 |
The Employment Allowance allows eligible small employers to reduce their employer NI liability by up to £10,500 per year from April 2025 (increased from £5,000). This allowance is available to employers whose total employer NI bill was less than £100,000 in the previous tax year. Most small businesses qualify.
Employer NI is an additional cost on top of gross salary. For a £35,000 salary, an employer pays approximately £4,500 in NI per year — meaning the total employment cost to the business is around £39,500 before any pension contributions.
Self-Employed National Insurance (Class 2 and Class 4)
Self-employed people pay two types of National Insurance if their profits exceed £12,570 per year:
Class 2 NI — Flat Rate
Class 2 NI is a flat weekly contribution of £3.45 per week, which amounts to £179.40 per year. It is paid by self-employed individuals with profits above the Small Profits Threshold of £12,570. Crucially, Class 2 is what qualifies self-employed people for the State Pension and certain contributory benefits.
If your profits are below £12,570, you can pay Class 2 voluntarily to protect your NI record and State Pension entitlement, which is often worthwhile.
Class 4 NI — Percentage Based
Class 4 NI applies to self-employed profits and is calculated as a percentage:
| Profit Band | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,570 – £50,270 | 6% |
| Over £50,270 | 2% |
Class 4 NI is paid via Self Assessment alongside your income tax. The rates are lower than employee NI (6% vs 8% in the main band) because self-employed people do not build entitlement to some contributory benefits, including Statutory Sick Pay and Statutory Maternity Pay.
For a self-employed person earning £40,000 profit, the total NI bill would be approximately £1,708 in Class 4 plus £179.40 in Class 2, giving a combined NI liability of around £1,887 per year.
How NI Affects Your State Pension Entitlement
The State Pension is one of the most valuable benefits linked to your National Insurance record. To receive the full new State Pension of £221.20 per week (2025/26), you need 35 qualifying years of NI contributions. To receive any State Pension at all, you need a minimum of 10 qualifying years.
A qualifying year is a tax year in which you:
- Earned at least £6,396 (the Lower Earnings Limit) from employment
- Paid Class 2 NI as a self-employed person
- Received NI credits (e.g., while claiming certain benefits, caring for children under 12, or being a carer)
- Made voluntary Class 3 NI contributions
You can check your NI record and State Pension forecast at any time via your personal tax account on HMRC's website. This shows exactly how many qualifying years you have and gives a projection of your State Pension based on your current record.
Gaps in Your NI Record — Voluntary Contributions
If you have gaps in your NI record — perhaps from years spent abroad, in education, or not working — you may be able to fill them by paying voluntary Class 3 NI contributions. The rate for 2025/26 is £17.45 per week, or £907.40 for a full year.
You can generally pay for gaps from the last six tax years, though an extended window exists for gaps between 2006 and 2017 in certain circumstances. The deadline for some of these extended payments has already passed, so it is worth checking your record promptly.
Paying voluntary contributions to gain a qualifying year typically costs around £824 and adds approximately £328 per year to your State Pension. Given the State Pension is paid for as long as you live, voluntary contributions are almost always a worthwhile investment for people with incomplete records.
People who are employed but earning below the Lower Earnings Limit, long-term unemployed, or self-employed with profits below £12,570 should give careful consideration to whether voluntary Class 3 contributions make financial sense for them.
Related: Income Tax and NI Together
National Insurance and income tax are calculated separately, but together they represent the combined tax burden on employment earnings. Understanding both is essential for accurate take-home pay calculations.
For an employee earning £35,000 in 2025/26:
- Income tax: £4,486 (20% on earnings above the £12,570 personal allowance)
- Employee NI: £1,794 (8% on earnings between £12,570 and £35,000)
- Total deductions: £6,280
- Take-home pay: £28,720 (£2,393 per month)
On top of this, the employer pays an additional £4,500 in employer NI contributions, bringing the total employment cost to around £39,500. This gap between what an employer pays and what an employee takes home illustrates why salary sacrifice arrangements — where benefits like pension contributions are structured to reduce NI for both parties — are so popular.
For the most complete picture of your take-home pay including both income tax and NI, use our Salary Calculator which combines both deductions into a single calculation.
Frequently Asked Questions
Employee NI: 8% on earnings between £12,570 and £50,270, and 2% above £50,270. Employer NI: 15% on earnings above £5,000. Self-employed Class 4: 6% on profits £12,570–£50,270, 2% above. Class 2: £3.45 per week if profits exceed £12,570.
No. Employees do not pay NI on the first £12,570 of annual earnings (the Primary Threshold). Employer NI applies above the Secondary Threshold of £5,000. Self-employed people do not pay Class 4 NI on the first £12,570 of profit.
Class 2 is a flat weekly charge of £3.45 (£179.40/year) paid by self-employed people with profits above £12,570. Class 4 is percentage-based: 6% on profits £12,570–£50,270, and 2% above £50,270. Both classes contribute to your State Pension entitlement.
You need 35 qualifying years of NI contributions for the full new State Pension (£221.20/week in 2025/26). A minimum of 10 qualifying years is needed to receive anything. Each qualifying year adds approximately £6.32 per week to your pension.
Yes. Voluntary Class 3 NI costs £17.45 per week (£907.40/year) for 2025/26 and fills gaps in your NI record. You can usually pay for gaps from the last 6 years. It is generally worthwhile if you have fewer than 35 qualifying years and have time to fill gaps before State Pension age.