UK National Insurance Contributions: Rates, Classes, and Credits

UK National Insurance contributions are payroll charges on earnings that build your entitlement to the State Pension and a handful of contributory benefits. For the 2026–27 tax year, employees pay 8% on weekly earnings between £242 and £967 and 2% above that, employers pay 15% on everything an employee earns above £96 a week, and the self-employed pay 6% on annual profits between £12,570 and £50,270 (plus 2% above) through Self Assessment. Which rate applies to you depends on how you earn, and your record — not your income tax history — is what determines your pension.

The Classes and Who Pays Them

The Social Security Contributions and Benefits Act 1992 splits contributions into several classes based on how you earn:

Class 1 is deducted from employee wages by the employer through PAYE, with both sides paying separately on the same earnings.
Class 1A and 1B are employer-only charges on benefits in kind (company cars, private medical cover) and on items covered by a PAYE Settlement Agreement. They never come out of your pay.
Class 2 is a flat weekly amount for the self-employed above the Small Profits Threshold.
Class 3 is voluntary, used to fill gaps in your record.
Class 4 is a percentage charge on self-employed annual profits.

If you’re both employed and self-employed, you can be paying Class 1 through your employer and Class 2 and Class 4 through Self Assessment in the same year.

Employee Rates and Thresholds for 2026–27

Your Class 1 contributions kick in once your earnings pass certain weekly thresholds:¹

Lower Earnings Limit — £129 per week. Earn at least this much and the week counts toward your contribution record even though you don’t yet pay anything.
Primary Threshold — £242 per week. This is where paying starts. The rate is 8% on every pound between £242 and £967 a week.
Upper Earnings Limit — £967 per week. Above this point, the rate drops to 2%.

Annually, those thresholds work out to £12,570 (Primary Threshold) and £50,270 (Upper Earnings Limit). On a £35,000 salary, you’d pay 8% on the portion between £12,570 and £35,000, roughly £1,794 for the year. Someone earning above £50,270 pays 8% on the band up to that limit and 2% on everything above.

Employer Contributions

Employers pay a separate Class 1 contribution on top of the employee’s, and their thresholds are considerably lower. For 2026–27, employers pay 15% on each employee’s earnings above the Secondary Threshold of £96 a week, or £5,000 a year.¹ There is no upper cap. Whether an employee earns £30,000 or £300,000, the employer pays 15% on everything above £5,000.

That’s a sharp change from previous years. Before April 2025, the Secondary Threshold was £175 a week (£9,100 annually) and the rate was 13.8%. Eligible employers can offset some of this cost through the Employment Allowance, which reduces the annual employer bill by up to £10,500 for 2026–27.¹ Companies with only a single director and no other employees can’t claim it.

Class 1A and 1B

Employers also owe Class 1A at 15% on the value of most benefits in kind. These are due by 22 July following the end of the tax year, or 19 July by post.² Class 1B covers items in a PAYE Settlement Agreement, with a deadline of 22 October (19 October by post).³

Self-Employed Contributions

If you’re self-employed, you deal with two classes. Class 2 is a flat weekly charge that builds pension and benefit entitlement. Class 4 is a percentage of profits and works more like an income-based tax.

For 2026–27, Class 4 is charged at 6% on annual profits between £12,570 and £50,270, and 2% on anything above £50,270.⁴ Both Class 2 and Class 4 are collected through your annual Self Assessment tax return rather than through PAYE.⁵ The Class 4 thresholds have been frozen at £12,570 and £50,270 since 2022–23 and are set to remain frozen until at least April 2028.

Company Directors

Directors are treated as employees for National Insurance but their contributions are calculated on an annual basis rather than per pay period. That matters because most directors don’t draw a steady monthly salary — they might take a small salary plus dividends, or pay themselves in irregular lump sums.⁶

HMRC allows two methods. The standard annual earnings period method suits irregular pay: each time the director is paid, you calculate National Insurance based on total pay for the year so far and subtract what’s already been deducted. The alternative method suits directors with regular monthly pay, calculating per period during the year and then running a year-end check to catch any shortfall.⁶

Directors pay on salary and bonuses above £12,570 for the year. Dividends aren’t subject to National Insurance at all, which is why many director-shareholders structure income as a small salary plus dividends. That’s legitimate, but it can mean fewer qualifying years for your State Pension unless the salary sits above the Lower Earnings Limit.

What Your Record Buys You

Contributions flow into the National Insurance Fund, which finances the State Pension, contributory benefits like Jobseeker’s Allowance and Employment and Support Allowance, and a portion of NHS funding. Because the fund is ring-fenced, your contribution record matters independently of your tax history. Gaps can cost you pension entitlement even if you’ve paid plenty of income tax.

You need at least 10 qualifying years to receive any State Pension, and 35 for the full amount.⁷⁸ A qualifying year means you either paid enough, received credits, or made voluntary contributions covering the gap. The full new State Pension is £241.30 a week for 2026–27.⁹ With between 10 and 35 qualifying years, you get a proportional amount — 20 years, for example, gives you roughly 20/35ths of the full rate. If you were contracted out of the additional State Pension before 2016, you may need more than 35 years to reach the full amount.

The State Pension age is currently rising from 66 toward 67. The transition began in April 2026 and is expected to reach 67 by early 2028. Your exact age depends on your date of birth.

Your record also unlocks other entitlements. Maternity Allowance is available if you’ve been registered as self-employed or employed for at least 26 weeks in the 66 weeks before your baby is due.¹⁰ For self-employed women this is often the primary maternity support, since Statutory Maternity Pay only comes through an employer. Bereavement Support Payment depends on the record of a deceased spouse or civil partner: they must have paid enough Class 1 or Class 2 in at least one tax year since April 1975, or their death must have been caused by a workplace accident or occupational disease.¹¹ Contributory Jobseeker’s Allowance and contributory Employment and Support Allowance also require a sufficient record.

Credits That Fill Gaps Without Payment

Not everyone earns enough to build qualifying years through paid contributions, and the system accounts for that. National Insurance credits fill gaps during periods when you aren’t working or earning below the Lower Earnings Limit.

Some credits are automatic. If you’re registered for Child Benefit for a child under 12, you receive Class 3 credits without applying, even if your income is too high to actually receive the Child Benefit payment. People claiming Jobseeker’s Allowance or Employment and Support Allowance receive Class 1 credits automatically for the duration of the claim.¹²

Others need an application. If you spend at least 20 hours a week caring for someone with a health condition and aren’t already receiving Carer’s Allowance, you can apply for Carer’s Credit.¹² Grandparents who look after a grandchild while the parent works can have the parent’s Child Benefit credits transferred to them, a widely overlooked option that can salvage qualifying years for people nearing retirement age.

Voluntary Contributions to Fill Older Gaps

If your record has gaps from time abroad, low earnings, or periods between jobs, you can fill them with voluntary Class 3 contributions at £18.40 a week for 2026–27. You can generally look back up to six years, with a deadline of 5 April each year. You have until 5 April 2032, for example, to fill gaps from the 2025–26 tax year.¹³

Whether it’s worth the cost depends on how close you are to 35 qualifying years and how many years you have before State Pension age. Paying £957 (52 weeks at £18.40) to buy a single qualifying year adds roughly £7 a week to your State Pension for life. Check your record before paying — you might already have enough qualifying years without spending anything.

How and When Contributions Are Paid

If you’re employed, contributions are handled through PAYE. Your employer deducts your employee National Insurance and income tax before paying you and sends both to HMRC, reporting each payment in real time using payroll software. Most employers pay HMRC monthly, though small employers expecting to pay less than £1,500 a month can arrange to pay quarterly.¹⁴

Self-employed people pay Class 2 and Class 4 through Self Assessment. The key deadline is 31 January following the end of the tax year, so contributions for 2026–27 are due by 31 January 2028. If you make payments on account, the second instalment is due by 31 July.¹⁵

Missing deadlines triggers penalties and interest. HMRC charges interest on late payments at 7.75% as of January 2026, tied to the Bank of England base rate plus 4%.¹⁶ Filing Self Assessment late brings a fixed £100 penalty immediately after the deadline, with further penalties accumulating the longer the return stays outstanding.¹⁵ Failing to notify HMRC of a liability at all — for example, starting to employ staff without registering as an employer — can attract penalties of up to 100% of the tax due, depending on whether the failure was careless, deliberate, or deliberately concealed.¹⁷

Checking Your Record

You can view your record online through your Personal Tax Account on GOV.UK. The service shows how many qualifying years you have, any gaps, whether you’d benefit from voluntary contributions, and how your State Pension forecast would change if you filled those gaps.¹⁸ It’s worth checking every few years, particularly if you’ve changed jobs frequently, had periods of self-employment, or spent time outside the UK.

When You Stop Paying

You generally stop paying National Insurance when you reach State Pension age, even if you continue working.¹⁹ Employees show proof of age (a birth certificate or passport) so their employer can stop deductions, or ask HMRC to send a confirmation letter instead.

Self-employed people stop owing Class 4 from the start of the tax year after they reach State Pension age. If you turn 67 in September 2026, you stop paying Class 4 from 6 April 2027 and settle your final Class 4 bill by 31 January 2028.¹⁹ You’ll still need to file a Self Assessment return for each year you work. Employers, however, keep paying their share of Class 1 on your wages regardless of your age. There is no age exemption for the employer’s 15%.

1
GOV.UK. Rates and Thresholds for Employers 2026 to 2027
2
GOV.UK. Pay Employers’ Class 1A National Insurance
3
GOV.UK. Liability: Payment Date for Class 1B NICs
4
GOV.UK. Rates and Allowances National Insurance Contributions
5
GOV.UK. Self-Employed National Insurance Rates
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GOV.UK. National Insurance for Company Directors
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GOV.UK. The New State Pension
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nidirect. Understanding and Qualifying for New State Pension
9
GOV.UK. Benefit and Pension Rates 2026 to 2027
10
GOV.UK. Maternity Allowance – Eligibility
11
GOV.UK. Bereavement Support Payment – Eligibility
12
GOV.UK. National Insurance Credits: Eligibility
13
GOV.UK. Voluntary National Insurance: How and When to Pay
14
GOV.UK. PAYE and Payroll for Employers
15
GOV.UK. Self Assessment Tax Returns: Deadlines
16
GOV.UK. HMRC Interest Rates for Late and Early Payments
17
GOV.UK. Compliance Checks: Penalties for Failure to Notify
18
GOV.UK. Check Your National Insurance Record
19
GOV.UK. National Insurance and Tax After State Pension Age: Stop Paying National Insurance