National Insurance for the Self-Employed (Class 2 & 4)

How National Insurance Works for Self-Employed

If you’re self-employed, you pay National Insurance contributions (NICs) in addition to Income Tax. There are two classes that apply:^[1]

Class 2 — a flat weekly rate
Class 4 — a percentage of your profits

Both are collected through Self Assessment (and will continue to be under MTD) — they’re calculated automatically when you file your Income Tax return online.

Class 2 National Insurance

Class 2 NICs are a flat-rate contribution that helps you build entitlement to the State Pension and certain benefits:^[1]

Detail	2026/27 Rate
Weekly rate	£3.45 (approximately — confirmed annually by HMRC)
Annual cost	Approximately £179
Small Profits Threshold	£6,725

If your profits are below the Small Profits Threshold (£6,725), you’re not required to pay Class 2, but you can choose to pay voluntarily to protect your State Pension entitlement.^[3]

Why pay voluntarily? Class 2 NICs are very cheap and count towards your qualifying years for the State Pension. If you have low self-employment profits, it’s usually worth paying voluntarily to avoid gaps in your National Insurance record.

Class 4 National Insurance

Class 4 NICs are charged as a percentage of your self-employment profits above a threshold:^[1]

Profit Band	Rate
Below £12,570 (Lower Profits Limit)	0%
£12,570 – £50,270 (Upper Profits Limit)	6%
Above £50,270	2%

Example: Self-employment profit of £40,000:

First £12,570: £0 NI
£12,570 to £40,000 = £27,430 at 6% = £1,645.80
Total Class 4 NI: £1,645.80

How NI Is Paid

Both Class 2 and Class 4 NICs are calculated and collected as part of your Self Assessment tax return (or Final Declaration under MTD):^[4]

They’re included in your 31 January tax bill
They form part of your payments on account
You don’t pay them separately — they’re added to your Income Tax liability

NI vs Income Tax — What’s the Difference?

	Income Tax	National Insurance
Based on	Total taxable income (all sources)	Self-employment profits only (Class 4)
Tax-free amount	£12,570 personal allowance	£12,570 Lower Profits Limit
Main rate	20% (basic rate)	6% (Class 4)
Higher rate	40% (over £50,270)	2% (over £50,270)
Entitlement	Funds general government spending	Builds State Pension and benefit rights

Employed and Self-Employed at the Same Time

If you’re both employed and self-employed:

Your employer deducts Class 1 NI from your salary (through PAYE)
You also pay Class 2 and Class 4 NI on your self-employment profits
There’s an annual maximum NI contribution — if your combined Class 1 and Class 4 exceed this, you can apply for a refund or deferral^[2]

National Insurance and the State Pension

You need 35 qualifying years of National Insurance contributions to get the full State Pension. Each year you pay Class 2 NI counts as a qualifying year.^[2]

If you have gaps in your NI record, you may be able to pay voluntary contributions to fill them. Check your NI record through your HMRC online account.

Frequently Asked Questions

How much National Insurance do self-employed people pay?

Self-employed individuals pay Class 2 NI (approximately £3.45 per week) and Class 4 NI at 6% on profits between £12,570 and £50,270, plus 2% on profits above £50,270.

Should I pay voluntary Class 2 National Insurance?

If your profits are below the Small Profits Threshold (£6,725), paying voluntary Class 2 NI is usually worthwhile as it is very cheap and counts towards your qualifying years for the State Pension.

How is self-employed National Insurance paid?

Both Class 2 and Class 4 NICs are calculated and collected through Self Assessment (or the MTD final declaration). They are added to your Income Tax bill and included in payments on account.

Do I pay National Insurance if I am employed and self-employed?

Yes. Your employer deducts Class 1 NI from your salary through PAYE, and you also pay Class 2 and Class 4 NI on your self-employment profits. An annual maximum applies to prevent overpayment.

Sources

Self-employed National Insurance rates — GOV.UK
National Insurance: introduction — GOV.UK
Pay voluntary Class 2 National Insurance — GOV.UK
Self Assessment tax returns — GOV.UK