National Insurance is a tax on earnings that also builds your entitlement to the State Pension and some benefits. In 2026/27 employees pay 8% on earnings between £242 and £967 a week (£1,048 to £4,189 a month) and 2% on anything above, while the self-employed pay 6% and 2% on profits above £12,570.
The easiest way to understand it is to see it on a payslip. This guide works through real examples, explains why National Insurance behaves differently from income tax, and shows what you get for it. For a rundown of every class, see National Insurance classes explained.
The 2026/27 rates and thresholds
These are the figures that apply from 6 April 2026 to 5 April 2027.
| Who | Earnings band | Rate |
|---|---|---|
| Employee (Class 1) | £1,048 to £4,189 a month | 8% |
| Employee (Class 1) | Above £4,189 a month | 2% |
| Employer | Above £5,000 a year | 15% |
| Self-employed (Class 4) | Profits £12,570 to £50,270 | 6% |
| Self-employed (Class 4) | Profits above £50,270 | 2% |
If you earn between the Lower Earnings Limit (£129 a week, or £6,708 a year) and the primary threshold, you pay nothing but still get a qualifying year for your State Pension.
Payslip examples for employees
Employee National Insurance is worked out on each pay period separately. For someone paid monthly, the calculation is: (monthly pay minus £1,048) × 8%, plus 2% of anything above £4,189.
| Annual salary | Monthly gross | Monthly NI |
|---|---|---|
| £15,000 | £1,250.00 | £16.16 |
| £25,000 | £2,083.33 | £82.83 |
| £40,000 | £3,333.33 | £182.83 |
| £60,000 | £5,000.00 | £267.50 |
On £60,000, the first £3,141 of monthly pay above the threshold is charged at 8% (£251.28) and the remaining £811 at 2% (£16.22). Payroll software uses exact figures, so your payslip may differ by a few pence. Our take-home pay calculator shows National Insurance alongside income tax for any salary.
Why a bonus month changes your NI
Income tax is cumulative across the tax year, but employee National Insurance is not. Each pay period stands alone, so an unusually large payment is charged as if you earned that much every month.
Example: someone on £40,000 receives a £5,000 bonus in March, so that month's pay is £8,333.33. Their NI for March is £251.28 on earnings up to £4,189, plus 2% of the £4,144 above it (£82.89), giving £334.17 instead of the usual £182.83. Because so much of the bonus sits above the upper threshold, it is charged mostly at 2%, but if your pay varies a lot from month to month the total can differ slightly from what an annual calculation suggests. HMRC does not refund this for employees with a single job; people with more than one job can sometimes get a refund if they overpaid overall.
How the self-employed pay
If you are self-employed you pay Class 4 National Insurance through your Self Assessment tax return, on your profits for the year rather than per pay period.
- Profits of £30,000: 6% of £17,430 (the amount above £12,570) = £1,045.80
- Profits of £60,000: 6% of £37,700 = £2,262, plus 2% of £9,730 = £194.60, total £2,456.60
- Compulsory Class 2 contributions were abolished from April 2024. If your profits are at least £7,105 (the Small Profits Threshold), you get a qualifying year automatically
- If profits are below £7,105, you can pay voluntary Class 2 at £3.65 a week to protect your State Pension record, which is far cheaper than Class 3
What your National Insurance pays for
National Insurance is not a personal savings pot, but each qualifying year counts towards contribution-based entitlements.
- New State Pension: £241.30 a week in 2026/27 with 35 qualifying years. You normally need at least 10 years to get anything, and you get a proportion in between
- New-style Jobseeker's Allowance and ESA: based on your contributions in recent tax years, not on savings or a partner's income
- Bereavement Support Payment depends on the National Insurance contributions of the partner who died
- National Insurance credits fill gaps while you claim certain benefits, care for someone or register for Child Benefit for a child under 12. See NI credits explained
How to check and protect your record
Check your National Insurance record and State Pension forecast in the HMRC app or your personal tax account on gov.uk. Look for years marked as not full.
- Gaps from the last six tax years can usually be filled with voluntary contributions; Class 3 costs £18.40 a week (£956.80 for a full year) in 2026/27
- Check whether you were entitled to credits first, for example while claiming Child Benefit, Universal Credit or Carer's Allowance, because credits are free
- Only pay for a year if it will increase your State Pension; the gov.uk forecast tells you this
- Read our guide to voluntary contributions before paying
Legal ways to pay less National Insurance
The main way employees reduce National Insurance is salary sacrifice: you give up some salary in exchange for a pension contribution or other benefit, so neither you nor your employer pays NI on that amount. A higher-rate taxpayer sacrificing into a pension saves 2% NI on top of 40% income tax relief; a basic-rate taxpayer saves 8% on top of 20%. From 6 April 2029, only the first £2,000 a year of salary-sacrificed pension contributions will be free of National Insurance. Model the effect with our pension calculator.
Once you reach State Pension age, you stop paying employee National Insurance even if you keep working, though your employer still pays. Any National Insurance you save is worth putting to work: SYM can turn it into a regular savings habit.
Frequently asked questions
Common questions about how National Insurance works.
How much National Insurance will I pay on £30,000?
Why did I pay more National Insurance this month?
Do I pay National Insurance after State Pension age?
How many years of National Insurance do I need for a full State Pension?
Is National Insurance charged on pension income or savings?
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