UK National Insurance 2026/27: Class 1-4 Rates

UK National Insurance 2026/27 - Class 1-4 rates and thresholds, qualifying years for State Pension, and when voluntary top-ups are worth paying.

National Insurance (NI) is the UK’s second-biggest payroll deduction after Income Tax. Unlike Income Tax, NI is technically a contribution to the state pension and certain benefits — the class you pay determines what you qualify for. Most people think of it as “that other tax on my payslip,” but understanding the classes matters if you’re self-employed, approaching State Pension age, or thinking about voluntary contributions to fill gaps.

The four (and a bit) classes

ClassWho paysWhat it gives you
Class 1 (employee)EmployeesQualifying year for State Pension + ESA, Jobseeker’s, Maternity
Class 1 (employer)Employers on your behalfYour State Pension / benefits (you, the employee)
Class 2Self-employed (voluntary only since April 2024)Qualifying year
Class 3Voluntary to fill gapsQualifying year (no benefits attached)
Class 4Self-employed profitsNo direct benefit — revenue for Treasury

Class 1A (on employer benefits-in-kind) and Class 1B (on PAYE Settlement Agreements) also exist but are paid by employers only — invisible from the employee side.

Class 1 — employee National Insurance

What you see on your payslip. Applied automatically through PAYE.

2026/27 rates and thresholds (unchanged from 2025/26)

  • Primary Threshold (PT): £12,570/year (£242/week / £1,048/month) — NI starts
  • Upper Earnings Limit (UEL): £50,270/year — main rate ends, upper rate begins
  • Main rate: 8% on earnings between PT and UEL
  • Upper rate: 2% on earnings above UEL

Worked example

Salary £45,000 in 2026/27:

  • NI-able pay above PT: £45,000 − £12,570 = £32,430
  • £32,430 falls entirely between PT and UEL
  • Main rate NI: £32,430 × 8% = £2,594.40/year (~£216/month)

At £60,000:

  • Earnings between PT and UEL: £50,270 − £12,570 = £37,700 × 8% = £3,016
  • Earnings above UEL: £60,000 − £50,270 = £9,730 × 2% = £194.60
  • Total NI: £3,210.60/year

NI letter / category

Your payslip shows a single letter: A for most employees, with variants like:

  • B — reduced rate for married women who elected into the scheme pre-1977 (very few left)
  • C — over State Pension age (no employee NI owed; employer still pays)
  • F/I/L/S — freeport employees (temporary NI relief)
  • H — apprentices under 25
  • J — employees deferring NI because they already max out elsewhere
  • M — under 21
  • V — veterans in first 12 months of civilian employment

Most of these don’t affect how much YOU pay — the letter mostly changes what the EMPLOYER pays for the role.

Class 1 — employer National Insurance

Your employer pays separately on top of your salary. You don’t see it on your payslip but it’s very real:

  • Secondary Threshold: £9,100/year (different from the £12,570 Primary Threshold)
  • Secondary rate: 15% (from April 2025 onwards — up from 13.8% in 2024/25)

Example: £45,000 salary → employer NI is (£45,000 − £9,100) × 15% = £5,385/year.

Adds roughly 10-15% to what the employer thinks your salary “costs” them. Relevant for understanding why some roles quote “total package” figures.

Class 2 — self-employed flat rate

Historically: self-employed sole traders paid £3.45-£3.50/week as a flat NI contribution. April 2024 reform ended the mandatory Class 2 charge for anyone with profits above the Small Profits Threshold (SPT) of £6,845 (2025/26). HMRC now treats you as if you’d paid Class 2 — you get the qualifying year for State Pension without actually paying.

2026/27 numbers

  • Weekly rate: £3.65 (up from £3.50 in 2025/26)
  • Small Profits Threshold: £7,105 (up from £6,845)

When does the rate still matter?

  • Profits BELOW the SPT: you can voluntarily pay Class 2 at £3.65/week to preserve your qualifying year. Cheap way to protect your State Pension eligibility.
  • Non-resident self-employed who want to maintain UK records: same voluntary path.
  • Historical back-years: Class 2 voluntary contributions for past years are sometimes still accepted up to 6 years back (longer for some special cases).

Class 3 — voluntary top-ups

Class 3 is a voluntary contribution for people who have gaps in their NI record and want to maintain qualifying years.

2026/27 weekly rate: £17.45 (check gov.uk for exact current figure — Class 3 rates are published with the other thresholds).

When it’s worth it:

  • You have fewer than 35 qualifying years and are approaching State Pension age
  • Filling a gap costs ~£900/year; each extra qualifying year adds roughly £302/year to your State Pension (2025/26 full rate £221.20/week ÷ 35 years × 52 weeks)
  • Pay-back typically 3 years — anyone living 3+ years past State Pension age is net positive

When it’s NOT worth it:

  • You already have 35+ qualifying years (maximum State Pension already secured)
  • You’re far from State Pension age and your career path will likely fill gaps anyway

Check your record in the Personal Tax Account or HMRC’s State Pension Forecast.

Class 4 — self-employed profits NI

This is the “real” self-employed NI — percentage-based on profits, like Class 1 for employees but different rates.

2026/27 rates and thresholds (unchanged from 2025/26)

  • Lower Profits Limit (LPL): £12,570
  • Upper Profits Limit (UPL): £50,270
  • Main rate: 6% on profits between LPL and UPL
  • Upper rate: 2% on profits above UPL

Worked example

Profits £40,000 self-employed in 2026/27:

  • Class 4 on £40,000 − £12,570 = £27,430 × 6% = £1,645.80/year
  • Plus voluntary Class 2 at £3.65/week (£189.80/year) if profits are below SPT — NOT the case here
  • Since profits above £7,105 SPT, Class 2 is deemed paid for qualifying-year purposes — no charge

Compare to an employee on the same £40,000 gross:

  • Class 1 NI: £2,194.40 (8% of £27,430)
  • Difference: self-employed pays £549 LESS on same income — but doesn’t get employer contribution to pension, sick pay, or holiday pay

Qualifying years for State Pension

To get the full new State Pension (£221.20/week in 2025/26) you need 35 qualifying years of NI contributions or credits. Fewer years = proportionally reduced pension, with a minimum of 10 qualifying years to get any State Pension at all.

Each tax year where you earn above the relevant threshold (£6,396 for Class 1; varies for self-employed) counts as one qualifying year. You can also get NI credits without paying:

  • Child Benefit claimants — automatic credits if child is under 12
  • Carer’s Credit — if caring for someone 20+ hours/week
  • Jobseeker’s Allowance / ESA — automatic while claiming
  • Specified Adult Childcare — grandparents providing childcare can claim credit transferred from working parent

How NI differs from Income Tax in practice

  • No cumulative smoothing: NI is calculated on each pay period in isolation. A £10,000 bonus in one month = more NI than £10,000 spread over 12 months, because the £10k might push that single month over the UEL.
  • Each job is separate: if you have two jobs each paying £30,000, each employer calculates NI independently — you’d pay less NI than one £60k job (where the upper earnings straddle the UEL).
  • State Pension age turns it off for employees: reach State Pension age → your Class 1 NI drops to 0%, employer’s continues.
  • Not refundable like Income Tax: if you overpay NI mid-year you generally have to claim it back; it doesn’t auto-reconcile at year-end the way Income Tax does through a P800.

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