Understanding National Insurance Contributions: UK Explained

National Insurance is the other big deduction on your payslip. Not income tax. The other one. It funds the State Pension, the NHS, and benefits like maternity allowance and Jobseeker's Allowance. You pay it, your employer pays it separately on top, and the amount depends on what you earn and how you earn it.

Unlike income tax, your NI record directly affects what you get in retirement. Pay enough for 35 years and you qualify for the full State Pension. Fall short and your pension shrinks proportionately.

What employees pay (Class 1)

If you're employed, NI is deducted automatically from your wages. The 2025/26 rates:

• 8% on weekly earnings between £242 and £967
• 2% on anything above £967 per week

In annual terms, that's 8% on earnings between roughly £12,570 and £50,270, then 2% above that.

On a £35,000 salary, you'd pay about £1,795 a year in National Insurance. On £60,000, it's around £3,210. You can see exactly how much using our salary calculator.

Your employer pays NI on top of your salary too: 15% on everything above £96 per week (about £5,000 a year). This doesn't come out of your pay, but it does affect what it costs to employ you.

What self-employed people pay (Class 2 and Class 4)

Self-employed NI works differently.

Class 4 is the main one. You pay it through Self Assessment based on your profits:

• 6% on profits between £12,570 and £50,270
• 2% on profits above £50,270

Class 2 used to be compulsory but became voluntary from April 2024. The rate is £3.45 per week. Paying it voluntarily counts towards your State Pension qualifying years, which is worth doing if your profits are low enough that Class 4 alone doesn't build up a full year's credit.

Filling gaps in your record (Class 3)

If you have years where you didn't pay enough NI, perhaps because you were abroad, not working, or earning below the threshold, you can make voluntary Class 3 contributions to fill those gaps.

The rate is £17.75 per week for 2025/26. You can usually go back and fill gaps for the last six tax years.

Whether it's worth paying depends on how many qualifying years you already have and how close you are to retirement. If you're sitting at 30 years and need 35 for a full pension, paying £923 to buy one year's Class 3 contributions could add roughly £275 per year to your State Pension for life. That's a payback period of about three and a half years.

Check your NI record and State Pension forecast at GOV.UK.

Quick reference: NI rates 2025/26

Class	Who pays	Rate
Class 1 (employee)	Employed workers	8% on £242-£967/week, 2% above
Class 1 (employer)	Employers	15% above £96/week
Class 2	Self-employed (voluntary)	£3.45/week
Class 4	Self-employed	6% on £12,570-£50,270 profits, 2% above
Class 3	Anyone (voluntary)	£17.75/week

NI credits: free qualifying years

You don't always have to pay to get NI credits. You receive them automatically if you're:

• Claiming Child Benefit for a child under 12
• On Jobseeker's Allowance or Employment and Support Allowance
• Receiving statutory maternity, paternity, or adoption pay
• Caring for someone 20+ hours a week (Carer's Credit)

These credits count towards your State Pension the same as paid contributions. If you're a stay-at-home parent claiming Child Benefit, you're building your pension record even though you're not earning.

Check you're paying the right amount

Payroll errors happen. Have a look at your payslip and check the NI deduction matches what you'd expect based on the rates above. If something looks off, raise it with your employer first, then contact HMRC if it doesn't get sorted.

You can check your full NI record by logging into your Personal Tax Account on GOV.UK. It shows every qualifying year, any gaps, and whether you can fill them.

If you're switching from employment to self-employment, your NI obligations change. Budget for Class 4 payments in your Self Assessment, and think about whether voluntary Class 2 is worth paying on top.

How NI affects your take-home pay

NI is one of the largest deductions from your salary after income tax. To see exactly how much you lose to NI and what your actual take-home is, run the numbers with our salary calculator.