National Insurance is a tax on earnings that you pay to qualify for the State Pension and some benefits. In 2026-27 you pay it from age 16 on wages over £242 a week, or on self-employed profits over £12,570.
It sits alongside Income Tax but is worked out separately, and for the self-employed it is paid through the same Self Assessment return. The figures below follow GOV.UK as checked on 19 October 2026.
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The classes
National Insurance comes in classes, depending on how you earn:
| Class | Who it is for | 2026-27 |
|---|---|---|
| Class 1 | Employees under State Pension age | Taken from pay over £242 a week from one job |
| Class 1A and 1B | Employers only | On staff expenses and benefits |
| Class 2 | Self-employed | Treated as paid at profits of £7,105 or more; voluntary below |
| Class 3 | Voluntary, to fill gaps in your record | For people not working, or earning under £129 a week |
| Class 4 | Self-employed | 6% on profits from £12,570 to £50,270, 2% above |
A self-employed tradesperson with a decent year usually pays only Class 4, in cash. Class 2 counts on your record without a bill once your profits reach £7,105. If you also have a job, Class 1 comes out of your wages as well. Our guide to self-employed National Insurance goes through the rates in more detail.
What it pays for
Paying in, or being treated as having paid, builds qualifying years on your National Insurance record. Those years decide what you can claim:
| Benefit | Class 1 | Class 2 | Class 3 |
|---|---|---|---|
| New State Pension | Yes | Yes | Yes |
| Contribution-based Employment and Support Allowance | Yes | Yes | No |
| Maternity Allowance | Yes | Yes | No |
| Bereavement Support Payment | Yes | Yes | No |
| New Style Jobseeker's Allowance | Yes | No | No |
GOV.UK also lists the basic and additional State Pension, which only apply if you reached State Pension age before 6 April 2016, so they're left out here. Class 4 is missing from the table on purpose. GOV.UK says Class 4 does not count towards state benefits or pensions. For the self-employed, it is Class 2 that does the work, which is why low earners can choose to pay it voluntarily.
You need 10 qualifying years for any new State Pension, and 35 for the full amount if your record started after April 2016. You also need a National Insurance number, so that your contributions and tax are recorded against your name only.
What this means for you
If you're self-employed with profits over £12,570, your National Insurance is mostly Class 4, worked out on your tax return and paid with your Income Tax, including through payments on account. It doesn't add to your pension, but as long as your profits are £7,105 or more, Class 2 is treated as paid, so each year still counts. If a year's profits fall below £7,105, that year may not count unless you pay voluntary Class 2, so check your record. Class 2 doesn't count towards New Style Jobseeker's Allowance, so self-employed work on its own doesn't build entitlement to it.
CIS deductions count as advance payments towards your tax and National Insurance bill, so some or all of a subcontractor's Income Tax and Class 4 may already be paid before the return is filed. Anything left is due by 31 January; anything overpaid is refunded.
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
Steps
- Find your National Insurance number and keep it with your tax papers.
- Work out your profit for the tax year: income minus allowable expenses.
- If it is over £12,570, expect Class 4 on your tax return.
- If it is under £7,105, decide whether to pay voluntary Class 2.
- Check your National Insurance record online for gaps once a year.
Use the free MTD check to see when Making Tax Digital starts for you, and the trades section for more guides on tax for trades.
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Questions people ask
Who has to pay National Insurance?
In 2026-27 you pay if you're 16 or over and either an employee earning more than £242 a week from one job, or self-employed with a profit of more than £12,570 a year. Employees stop paying Class 1 when they reach State Pension age. If you're self-employed, Class 4 stops from the 6 April after you reach it.
What National Insurance do self-employed people pay?
Class 4, at 6% on profits between £12,570 and £50,270 and 2% above, paid through your Self Assessment return. Class 2 is treated as paid if your profits are £7,105 or more, so it costs nothing but still counts towards your State Pension.
Is National Insurance the same as Income Tax?
No. It is a separate charge with its own classes and thresholds. For the self-employed both start from the same profit figure and are paid through the same Self Assessment return, so they arrive as one bill.
Does Class 4 National Insurance count towards my State Pension?
No. GOV.UK says Class 4 contributions do not count towards state benefits or pensions. For self-employed people it is Class 2, treated as paid when profits are £7,105 or more, that builds the record.
Do I need a National Insurance number?
Yes. GOV.UK says you need one so your National Insurance contributions and tax are recorded against your name only. Our guide on finding your National Insurance number explains where to look.
Sources
- National Insurance (GOV.UK)
- National Insurance: National Insurance classes (GOV.UK)
- National Insurance: What National Insurance is for (GOV.UK)
- Self-employed National Insurance rates (GOV.UK)
- The new State Pension: Eligibility (GOV.UK)
- The new State Pension: What you'll get (GOV.UK)
- Understand your Self Assessment tax bill: Payments on account (GOV.UK)
- What you must do as a CIS subcontractor (GOV.UK)
- Tax and National Insurance after State Pension age (GOV.UK)
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
Righto Tax is a trading name of NJG Consultancy Ltd, registered in England and Wales, company number 16095900. Registered office: Jubilee House, East Beach, Lytham St Annes, FY8 5FT.
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- Use the free Making Tax Digital checker to see your own start date and deadlines.
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