Class 4 NI: Rates & Thresholds

Key facts

Class 4 NI is charged at 6% on profits between £12,570 and £50,270 (2025/26).
Profits above £50,270 are charged at 2%.
Class 4 does not provide any entitlement to the State Pension or contributory benefits.
It is collected through Self Assessment (or the MTD final declaration) alongside Income Tax.

What Is Class 4 National Insurance?

Class 4 National Insurance is a contribution paid by self-employed people based on their annual profits. Unlike Class 2 (a flat-rate weekly amount), Class 4 is a percentage of your profits — similar in structure to Income Tax.^[1]

Critically, Class 4 NI does not provide any entitlement to the State Pension or contributory benefits. It is, in effect, an additional tax on self-employment income.

Class 4 Rates and Thresholds (2025/26)

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

Note: The Lower Profits Limit (£12,570) is aligned with the Income Tax personal allowance. This means if your self-employment profit is below £12,570, you pay neither Class 4 NI nor Income Tax on those profits.

How Class 4 NI Is Calculated

Class 4 NI is calculated on your self-employment profits after deducting allowable business expenses. The calculation follows the same profit figure used for Income Tax purposes.^[1]

Example — profit of £40,000:

First £12,570: £0 (below Lower Profits Limit)
£12,570 to £40,000 = £27,430 at 6% = £1,645.80
Total Class 4 NI: £1,645.80

Example — profit of £70,000:

First £12,570: £0
£12,570 to £50,270 = £37,700 at 6% = £2,262.00
£50,270 to £70,000 = £19,730 at 2% = £394.60
Total Class 4 NI: £2,656.60

How It Is Collected

Class 4 NI is collected through Self Assessment, not through a separate payment:^[3]

It is calculated automatically when you file your Self Assessment tax return
It is added to your Income Tax and Class 2 NI to form your total tax bill
The main deadline is 31 January following the end of the tax year
If you make payments on account, Class 4 NI is included in those payments (due 31 January and 31 July)

Under MTD for Income Tax, Class 4 NI will continue to be calculated as part of the final declaration process.

Why Class 4 Gives No Benefit Entitlement

Class 4 NI is unusual because it does not provide any entitlement to the State Pension or contributory benefits. This means:^[2]

Paying Class 4 does not count as a qualifying year for the State Pension
It does not provide entitlement to Maternity Allowance, ESA, or JSA
It is effectively a straightforward tax on self-employment profits

Your qualifying years for the State Pension come from Class 2 NI (or Class 1 if you are also employed). This is why paying Class 2 — even voluntarily — is important for the self-employed.

Class 4 NI vs Income Tax

Feature	Income Tax	Class 4 NI
Tax-free amount	£12,570 (Personal Allowance)	£12,570 (Lower Profits Limit)
Main rate	20% (basic rate)	6%
Higher rate	40% (above £50,270)	2% (above £50,270)
Based on	Total taxable income (all sources)	Self-employment profits only
Collected via	Self Assessment / PAYE	Self Assessment only
Benefit entitlement	None	None

Effective tax rate: A self-employed basic-rate taxpayer pays a combined marginal rate of 26% on profits between £12,570 and £50,270 (20% Income Tax + 6% Class 4 NI). Above £50,270, the combined rate is 42% (40% + 2%).

Recent Class 4 Rate History

Tax Year	Main Rate	Additional Rate	Lower Profits Limit	Upper Profits Limit
2025/26	6%	2%	£12,570	£50,270
2024/25	6%	2%	£12,570	£50,270
2023/24	9%	2%	£12,570	£50,270
2022/23	9.73%	2.73%	£11,909	£50,270
2021/22	9%	2%	£9,568	£50,270

How to Reduce Your Class 4 Bill

Since Class 4 NI is calculated on your profits, the main way to reduce it is to claim all allowable business expenses. Legitimate deductions include:

Office and premises costs
Travel and vehicle expenses
Professional fees (accountancy, legal)
Stock and materials
Staff costs
Use of home as office (proportional claim)

Frequently Asked Questions

What are the Class 4 NI rates for 2025/26?

The main rate is 6% on profits between £12,570 (Lower Profits Limit) and £50,270 (Upper Profits Limit). Profits above £50,270 are charged at 2%. The first £12,570 of profit is not subject to Class 4 NI.

Does Class 4 NI count towards my State Pension?

No. Class 4 NI does not build any entitlement to the State Pension or contributory benefits. It is effectively a tax on self-employment profits. Only Class 2 NI (and Class 1 for employees) counts towards your pension record.

How is Class 4 NI calculated?

Class 4 NI is calculated on your self-employment profits (after allowable expenses) as reported on your Self Assessment tax return. The Lower Profits Limit (£12,570) is aligned with the Income Tax personal allowance, so if your profits are below £12,570, you pay neither Income Tax nor Class 4 NI.

When do I pay Class 4 NI?

Class 4 NI is included in your Self Assessment tax bill and is due on 31 January following the end of the tax year. If you make payments on account, Class 4 NI is included in those advance payments (31 January and 31 July).

Sources

Self-employed National Insurance rates — GOV.UK
National Insurance: introduction — GOV.UK
Self Assessment tax returns — GOV.UK