NI Tax Brackets: Employee, Employer, Self-Employed and Class 3

For the 2025/26 tax year, the National Insurance tax brackets in the UK sit at different thresholds depending on who is paying. Employees pay 8% on weekly earnings between £242 and £967, then 2% on anything above that. Employers pay 15% on all earnings above £96 a week, with no upper cap. Self-employed workers pay 6% on annual profits between £12,570 and £50,270, dropping to 2% above the upper limit. Several thresholds shifted for 2025/26, particularly on the employer side, so older figures are almost certainly wrong.

Employee Bands (Class 1)

Employee contributions run across four bands based on weekly earnings. The move from 0% to 8% happens at a specific pound figure, not gradually.¹

Below £125 a week (Lower Earnings Limit): nothing to pay, but earnings at this level still count toward qualifying for certain state benefits including the basic State Pension.
£125 to £242 a week: still nothing to pay, and benefit entitlements continue to build.
£242 to £967 a week (Primary Threshold to Upper Earnings Limit): 8% on every pound in this band.
Above £967 a week: 2% on all earnings above this point.

In monthly figures, the Primary Threshold is £1,048 and the Upper Earnings Limit is £4,189. Early indications suggest employee rates and the Primary Threshold will stay the same for 2026/27, though the Lower Earnings Limit rises to £129 per week.

A quick worked example. Someone earning £35,000 a year (about £673 a week) pays 8% only on the portion between £242 and £673. The first £242 each week is contribution-free. That works out to roughly £34.48 a week, or about £1,793 for the year. Your employer runs the arithmetic and deducts it before you see your pay.

Employer Bands

The employer side changed noticeably from April 2025. The Secondary Threshold, where employer contributions begin, dropped from £175 to £96 per week, and the rate rose from 13.8% to 15%.¹ For businesses, that is a meaningful cost increase on every employee.

Employers pay 15% on all earnings above £96 a week (£417 a month), with no upper cap. Unlike employees, who move to a reduced 2% rate above the Upper Earnings Limit, employers pay the full 15% on every pound above the Secondary Threshold no matter how high the salary goes. That makes employer NI the single largest payroll cost beyond wages for most UK businesses.

Class 1A and Class 1B are employer-only charges on benefits and expenses provided to staff, such as company cars or private medical insurance, currently charged at 15%.¹

Reliefs That Reduce the Employer Bill

Eligible employers can knock up to £10,500 per tax year off their total employer NI bill through the Employment Allowance, claimed through payroll software and offset directly against Class 1 liability.² For a small business with a handful of employees, that can wipe out the employer NI bill entirely.

Hiring a qualifying military veteran into their first civilian role lets an employer use Category V and pay zero employer NI on earnings up to the Veterans Upper Secondary Threshold of £967 a week. The relief lasts 12 months from the veteran’s first day of civilian employment.³ Apprentices under 25 attract a similar break: no employer NI on earnings up to the Apprentice Upper Secondary Threshold, also £967 a week. Businesses inside a designated Freeport or Investment Zone special tax site can claim relief on qualifying new hires, with no contributions due on earnings up to £481 a week for up to 36 months per employee.⁴

Self-Employed Bands (Class 2 and Class 4)

Self-employed workers deal with two classes of NI, both calculated on annual profits through the Self Assessment tax return rather than deducted from weekly pay.

Class 2

From April 2024, Class 2 is no longer compulsory for self-employed people with profits above the Lower Profits Limit of £12,570. Benefit entitlements still build up automatically without any payment. If your profits fall below the Small Profits Threshold of £6,845, you can choose to pay Class 2 voluntarily at £3.50 a week to protect your State Pension record.¹

Class 4

Class 4 is the main NI charge on self-employed profits and works in two bands:

£12,570 to £50,270 (Lower to Upper Profits Limit): 6% on every pound of profit in this range.
Above £50,270: 2% on all profits above this point.

So someone with £60,000 in annual profit pays 6% on £37,700 (the band between £12,570 and £50,270) plus 2% on £9,730 (the amount above £50,270). That comes to roughly £2,457 in Class 4 NI for the year. The Class 4 rate sat at 9% as recently as 2023/24, so the current 6% reflects a substantial cut over a short period.¹

Voluntary Class 3

If you have gaps in your NI record from living abroad, taking time out of work, or earning below the Lower Earnings Limit, you can make voluntary Class 3 contributions at £17.75 a week for 2025/26. That comes to roughly £923 for a full year.⁵ Whether it is worthwhile depends on how close you are to enough qualifying years for the full State Pension. You can check your NI record online through your Government Gateway account to see exactly where the gaps fall before committing.

Who Pays Nothing

You stop paying employee and self-employed NI once you reach State Pension age, even if you keep working. For most people in 2025/26 that age is 66. The State Pension age is increasing to 67 between May 2026 and March 2028, starting with people born after 5 April 1960. If you were born between April 1960 and March 1961, your State Pension age falls somewhere between 66 years and 1 month and 66 years and 11 months, depending on your exact birth date. Anyone born on or after 6 March 1961 has a State Pension age of 67.⁶

To stop employee deductions once you reach State Pension age, show your employer a birth certificate or passport as proof. HMRC previously issued Certificates of Age Exception (form CA4140), but those are no longer being issued.⁷ Employers still pay their share on your earnings regardless of your age; the exemption only covers the employee side.

Employees earning below the Primary Threshold (£242 a week) and self-employed workers with profits below the Lower Profits Limit (£12,570 a year) owe nothing in mandatory contributions either.⁸ Employees earning between the Lower Earnings Limit (£125) and the Primary Threshold (£242) sit in a useful middle ground: no NI due, but qualifying years still build up.

How the Contributions Get Paid

If you are employed, you never handle the payment yourself. Your employer calculates it, deducts it from your gross pay through PAYE, and sends it to HMRC along with the employer share.⁹ Your payslip shows the amount deducted each pay period, and your P60 at the end of the tax year confirms the annual total.

Self-employed NI is settled through Self Assessment. The payment deadline is 31 January following the end of the tax year. Miss that date and you face an immediate £100 late filing penalty, with escalating charges after that: £10 a day after three months (up to £900), then further penalties of 5% of the tax owed or £300 (whichever is greater) at six and twelve months.¹⁰ HMRC also charges late payment interest at 7.75% as of January 2026, calculated as the Bank of England base rate plus 4%.¹¹

1
GOV.UK. Rates and Allowances: National Insurance Contributions
2
GOV.UK. Employment Allowance: What You’ll Get
3
GOV.UK. Claim National Insurance Contributions Relief for Veterans as an Employer
4
GOV.UK. Check if You Can Claim National Insurance Relief in UK Freeport or Investment Zone Special Tax Sites
5
GOV.UK. Voluntary National Insurance: Rates
6
GOV.UK. State Pension Age Timetables
7
GOV.UK. What to Do When an Employee Reaches State Pension Age
8
GOV.UK. National Insurance: Introduction
9
GOV.UK. National Insurance: Introduction – How Much You Pay
10
GOV.UK. Self Assessment Tax Returns: Penalties
11
GOV.UK. HMRC Interest Rates for Late and Early Payments