How National Insurance works
National Insurance (NI) is a tax on earnings that also builds your right to benefits like the State Pension. Here is how it works in 2026/27.
The short answer
If you are an employee, you pay 8% National Insurance on earnings between £12,570 and £50,270 a year, and 2% on earnings above that. Self-employed people pay Class 4 NI on profit. Your NI record also decides whether you get a full State Pension.
Employees: Class 1
| Yearly earnings | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,570 to £50,270 | 8% |
| Over £50,270 | 2% |
On a £30,000 salary that is 8% of £17,430, which is £1,394 a year. Employers pay National Insurance too, on top of your pay, so it does not come out of your salary. See GOV.UK: National Insurance rates and categories.
Self-employed people
Sole traders pay Class 4 NI at 6% on profit between £12,570 and £50,270, and 2% above. Class 2 is no longer payable above £7,105 profit, though it still counts towards your record. Our self-employed tax calculator shows the total.
NI and your State Pension
Each tax year in which you pay or are credited enough NI is a qualifying year. You need 35 qualifying years for the full new State Pension, and at least 10 to get any. Time spent claiming certain benefits or getting Child Benefit for a young child can earn credits even if you do not work. You can fill gaps by paying voluntary contributions. See GOV.UK: Check your National Insurance record.
When you stop paying
Employees stop paying National Insurance when they reach State Pension age, even if they keep working. Employers still pay it on their wages.
Where to learn more
This guide is for information only and is not tax advice.