National Insurance: classes, rates and what it pays for

National Insurance is a contribution taken from earnings that does two jobs at once: it helps fund the welfare system, and it builds your personal entitlement to the State Pension and certain benefits. You pay it if you are 16 or over and either an employee earning more than £242 a week from one job, or self-employed and making a profit of more than £12,570 a year¹. Your employer takes employee contributions automatically from your pay, so you never receive a bill for them.

The main rates for 2026 to 2027 are 8% and 2% for employees, 6% and 2% on self-employed profits, and 15% for employers on most earnings above their threshold². The amount of State Pension you eventually get depends on your National Insurance record and when you reach State Pension age³, so the years in which you pay (or are credited) matter as much as the amounts.

What National Insurance is and what it pays for

National Insurance is not a savings account with your name on it. Contributions from earners, employers and others are paid into the National Insurance Fund, which is the pool that pays for contributory benefits and the State Pension². What you personally get out of it is an entitlement built up year by year: you pay National Insurance contributions to qualify for certain benefits and the State Pension¹.

The entitlement works through qualifying years. A National Insurance qualifying year is one in which you did one or more of the following: worked and paid National Insurance, got National Insurance credits, or paid voluntary National Insurance contributions¹⁰. Enough qualifying years, based on your contributions, is what makes you eligible for the State Pension once you reach State Pension age³. Years in which you earned too little to pay, but enough to be treated as having paid, still count, which is why the thresholds below the payment line matter as much as the rates above it.

The full new State Pension rate is £241.30 a week, and each qualifying year added to your record after 6 April 2016 increases your State Pension amount up to that maximum³. So a gap in your record is not just a gap in a spreadsheet: it can reduce the pension you receive for the rest of your life. That is also why parents and carers who are not earning can have their record protected through credits and Home Responsibilities Protection, covered later in this page.

Who pays: from age 16 on earnings over £242 a week

Mandatory National Insurance starts at 16. You pay it if you are 16 or over and either an employee earning more than £242 a week from one job, or self-employed and making a profit of more than £12,570 a year¹. The weekly and monthly figures are the same threshold expressed two ways: £242 per week or £1,048 per month¹¹.

Below that line there is a second, lower threshold. An employee earning from £129 to £242 a week from one job usually does not pay anything, but may still qualify for benefits and the State Pension¹. The £129 figure is the Lower Earnings Limit, the floor at which your earnings start to count towards your record⁷. Above £242, Class 1 contributions become mandatory: you must pay them if you work for an employer and your earnings are at or above the primary threshold¹².

For the self-employed, the equivalent floor is profits of £7,105 or more a year, where you usually do not pay but may still qualify for benefits and the State Pension¹. The payment line sits at £12,570 of profits, as the next section sets out.

Class 1 for employees: 8% and 2%

Employee Class 1 contributions for 2026 to 2027 are charged in bands. On category A earnings, you pay nothing up to £242 a week, 8% on weekly earnings from £242.01 to £967 (£1,048.01 to £4,189 a month), and 2% on everything above £967 a week⁴. The official rates table for the tax year confirms the same structure: 8% between the Primary Threshold and the Upper Earnings Limit, and 2% above the Upper Earnings Limit⁵.

Employee Class 1 rates by weekly earnings band, 2026 to 2027.

To see how this works on a real payslip: on weekly earnings of £1,000, an employee's National Insurance payment for the week is £58.66⁴. That is 8% of the band from £242.01 to £967 plus 2% of the £33 above the upper limit, taken automatically by the employer.

The employer pays too. The employer rate on earnings above the Secondary Threshold is 15% for 2026 to 2027⁵, and the same 15% applies as Class 1A on expenses and benefits given to employees⁴. Class 1B, a related class, is paid only by employers who enter into a PAYE Settlement Agreement with HMRC for tax on items they settle on employees' behalf¹².

The 8% main rate is recent history. The employee main rate was 12%, cut to 10% on 6 January 2024, then cut by another 2 percentage points to 8% from 6 April 2024¹³. The National Insurance Contributions (Reduction in Rates) Act 2024 made the second cut, reducing the main primary percentage paid by employees from 10% to 8%¹⁴.

Self-employed National Insurance: 6% on profits over £12,570

If you are self-employed, two classes can apply. Class 4 is charged on your profits: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270 for 2026 to 2027⁶. The official rates and allowances table confirms the same bands, from the Lower Profits Limit to the Upper Profits Limit at 6%, and above the Upper Profits Limit at 2%⁵.

Class 2 is a small flat weekly contribution. The ordinary Class 2 rate is £3.65 per week⁷, and Class 2 contributions have to be paid for each week in which you are both self-employed and have relevant profits at or above the small profits threshold¹². Below that threshold you pay nothing, but you can choose to pay voluntary Class 2 contributions to avoid gaps in your National Insurance record¹⁵.

The treatment of small profits changed in 2024. Regulations introduced the treatment of self-employed earners with profits at or above the small profits threshold as having actually paid Class 2 contributions, removing the liability to pay while keeping the record intact¹⁶. In practice this means many self-employed people no longer hand over Class 2 cash, yet their qualifying years still build up.

Two figures are worth knowing alongside the rates. The 2024 Act's impact assessment put the saving from the rate cuts at £310 a year for an average self-employed person with profits of £28,000¹⁴. And the Upper Profits Limit is set to stay at £50,270 from April 2028 to April 2031, alongside the employee Upper Earnings Limit, under the policy announced at Budget 2025¹⁷. For how self-employed income is taxed more broadly, see how self-employed income is taxed, and for the detail on Class 2, see Class 2 National Insurance: has it been abolished?.

Earning below the threshold: how your record is still protected

Earning below £242 a week does not mean your National Insurance record stands still. If you are an employee earning from £129 to £242 a week from one job, or self-employed with profits of £7,105 or more a year, your contributions are treated as having been paid to protect your National Insurance record¹. You pay nothing, but the year can still count as a qualifying year.

This protection matters most for people whose earnings dip in and out of the threshold: part-time workers, people on low pay, and the self-employed in a bad year. It is separate from National Insurance credits, which protect the record of people who are not earning at all, for example because they are claiming certain benefits. The page on National Insurance credits covers who gets them and how to apply.

Parents and carers have an additional route. Home Responsibilities Protection was the scheme that protected the records of people whose time was taken up with caring responsibilities, and you can still apply for HRP if you think it is missing from your National Insurance record¹⁸. HMRC has been filling in historic HRP where it was overlooked, so it is worth checking your record if you claimed Child Benefit in the past while not working.

Working for more than one employer: thresholds apply per job

The £242 weekly threshold applies to each job separately, not to your combined income. If you have two jobs and each pays below the threshold, you may pay no employee National Insurance at all even though your total earnings are well above it. Conversely, a single job above the threshold attracts contributions on that job's earnings alone. This is one of the real differences between National Insurance and income tax, which looks at your total income across the year.

Students are a common case. A full-time student with a holiday job still pays National Insurance if they earn more than the weekly threshold¹⁹. Students working abroad during holidays for a UK employer are treated the same as any UK worker; working abroad for a foreign employer means they will not normally pay National Insurance in the UK, though they may have to pay foreign contributions¹⁹.

The per-job rule also feeds into statutory payments. If you have more than one job, you may be able to get Statutory Paternity Pay from each employer²⁰. For Maternity Allowance, agency workers are treated as employed if they pay Class 1 contributions on their earnings, or would pay but do not because of their age or level of earnings²¹. Statutory payments themselves are generally built on pay that counts for National Insurance purposes, or would count if you earned enough or were old enough to pay²¹.

When you stop paying: State Pension age and pension income

National Insurance has an end point. You pay it from age 16 until you reach State Pension age⁸. Employed people stop paying Class 1 contributions when they reach State Pension age¹, and if you keep working past it, you do not pay any National Insurance at all on that work²². You are still entitled to the National Minimum Wage for any paid work you do after State Pension age²².

When contributions start and stop, for employees and the self-employed.

The self-employed stop on a different clock. If you are self-employed you stop paying Class 4 National Insurance from the 6 April (the start of the tax year) after you reach State Pension age¹; put another way, you stop paying Class 4 contributions at the end of the tax year in which you reach State Pension age⁸. So someone who reaches State Pension age in, say, November keeps paying Class 4 until the following 5 April.

The age itself is moving. Between April 2026 and March 2028, the State Pension age is rising from 66 to 67²³. That means some people will pay National Insurance for a year longer than those born slightly earlier. Other entitlements follow the same boundary: Bereavement Support Payment eligibility and payments stop when you reach State Pension age, regardless of whether you choose to delay your State Pension²⁴. If you do delay claiming, the extra regular amount you get because you deferred will usually increase each year after you claim, based on the Consumer Price Index²⁵. For the tax side of retirement income, see do you pay income tax on the State Pension?.

Working abroad or coming to the UK to work

The rates for UK National Insurance contributions are the same whether you live in the UK or abroad¹². What changes abroad is whether you pay at all, and into which country's system.

If you are sent abroad by a UK employer, you may keep paying UK Class 1 contributions if your employer has a place of business in the UK, you are ordinarily resident in the UK, you were resident in the UK immediately before starting the employment abroad, and you are not covered by a social security agreement between the UK and another country¹². Paying National Insurance while abroad protects your State Pension and your entitlement to other benefits and allowances²⁶.

People coming the other way, to work in the UK, usually start paying National Insurance when they work here²⁷. Two exemptions apply. You do not need to pay or get a National Insurance number if you have a certificate proving you pay social security contributions in the EU, Iceland, Liechtenstein, Norway or Switzerland, or a certificate from a country with a social security agreement with the UK²⁷. And if you are sent to the UK temporarily by an employer in your home country, from a country outside that list and without a social security agreement, you usually will not need to pay UK National Insurance for your first 52 weeks in the UK²⁷.

Voluntary contributions from abroad are being tightened. A measure announced for periods abroad from 6 April 2026 restricts access to voluntary National Insurance contributions for individuals living or working outside the UK, increasing the qualifying conditions for paying Class 3 contributions while abroad from the previous requirement of three years' residence in the UK, or three years' contributions²⁸. If you did not pay National Insurance while abroad, you can check your National Insurance record to see how your State Pension might be affected²⁹. The wider rules are covered in moving abroad or to the UK: your residence status.

Salary sacrifice pension relief to be capped at £2,000

A significant change is coming for people who pay into a workplace pension through salary sacrifice. From April 2029, the amount exempt from National Insurance contributions will be capped at £2,000 a year for employee contributions made via salary sacrifice⁹. Above that cap, earnings forgone under a salary sacrifice scheme will be subject to National Insurance at existing rates, for both employer and employee³⁰.

The government's estimate of who is affected gives a sense of scale. Of those using salary sacrifice for pensions, 3.3 million sacrifice more than £2,000 of salary or bonuses, while around 4.3 million people are fully protected by the £2,000 threshold³⁰. For employees whose sacrifice exceeds the limit, the average additional employee National Insurance liability is estimated to be £84 in the first year of impact, tax year 2029 to 2030³⁰. The measure works by removing the Optional Remuneration Arrangements excluded exemption for employer pension contributions for Class 1 National Insurance contributions where arrangements exceed the annual cap³¹. The cap was announced at Budget 2025, capping NICs relief on salary sacrifice into pension schemes to the first £2,000 of pension contributions per person³².

One point of background on the current position: employers do not pay NICs on pension contributions, but employees and self-employed people do pay National Insurance on their own earnings³³. Salary sacrifice exploits that gap, which is why it is being narrowed.

Refunds, mistakes and where to get help

Overpaid National Insurance can sometimes be reclaimed. If your income varies or falls during the tax year, it is possible that your total for the year will fall below the repayment threshold even if your earnings exceeded the weekly or monthly threshold in some pay periods³⁴. In that situation a refund may be due, because Class 1 is assessed per pay period rather than annually.

For contributions paid in error, there is a specific route. You can apply for a refund if HMRC has written to you about overpaid National Insurance contributions, or contributions paid in error by your employer, and only if you have received a letter from HMRC telling you that you may be due a refund³⁵. The guidance on applying was updated in June 2026 to cover refunds for overpaid contributions³⁵. If you have overpaid income tax as well, the process is covered in claiming a refund when you have overpaid income tax.

A few edge cases are worth knowing. On termination payments, your employer will pay employer Class 1A National Insurance on any amount over a combined total of £30,000³⁶. And if you work through an agency, an umbrella company or as a contractor, it is worth checking that the tax and National Insurance shown on your payslip or deduction statement has been paid correctly, because these arrangements are where payslip errors and fraud most often appear³⁷. Suspected HMRC contact that asks for money can be checked through the guidance on fake HMRC calls, texts and emails.

If you think HMRC has got your contributions wrong, you can complain directly to HMRC and escalate to the Independent Adjudicator, as covered in how to complain about HMRC. Your starting point for checking everything is your own record: the HMRC app and online account shows your National Insurance record, your qualifying years and your State Pension forecast, which is the quickest way to spot a gap before it costs you.