National Insurance
National Insurance explained: Class 1, Class 2 and Class 4
How employee NI differs from the self-employed classes, and which thresholds apply.
Last reviewed 22 August 2026
Employees pay Class 1
Employees pay Class 1 National Insurance on earnings above the primary threshold, at a main rate up to the upper earnings limit and a lower rate above it. Employers pay their own separate contribution, which does not appear on your payslip as your deduction.
Unlike income tax, Class 1 is usually worked out per pay period rather than cumulatively, so an irregular month can produce a deduction that annual arithmetic does not predict.
The self-employed classes
Sole traders pay Class 4 contributions on trading profits between a lower and upper limit, with a lower rate above the upper limit. Class 2 rules have changed in recent years and depend on whether profits pass a small-profits threshold.
Our self-employed calculator reads both from the tax-year configuration, so the figures follow the year you select rather than a single hard-coded rule.
Why NI matters beyond the deduction
Contributions build entitlement to certain contributory benefits and the State Pension record. Checking your record is a separate exercise from estimating a deduction, and HMRC holds the authoritative view of your position.
Calculators for this topic
This guide explains how the rules generally work. It is not tax advice, and your own position depends on your full circumstances — you may wish to seek professional advice.