Understanding National Insurance: Rates, Thresholds, and What You Get (2025/2026)
National Insurance (NI) is a tax on your earnings that funds state benefits including the State Pension, NHS, and other social security programs. Here's everything you need to know about NI in the 2025/2026 tax year.
What is National Insurance?
National Insurance is a separate tax from income tax. While income tax goes to general government spending, NI is specifically linked to social insurance benefits. Your NI contributions build your entitlement to:
- State Pension
- Jobseeker's Allowance
- Employment and Support Allowance
- Maternity Allowance
- Bereavement benefits
Class 1 National Insurance (Employees)
If you're employed, you pay Class 1 NI contributions. For the 2024/2025 tax year, the rates are:
- Below £12,570: 0% (no NI due)
- £12,571 to £50,270: 8% on earnings in this band
- Over £50,270: 2% on earnings above this threshold
Your employer also pays Class 1 secondary contributions at 13.8% on earnings above £9,100 per year.
Class 2 and Class 4 (Self-Employed)
If you're self-employed, you pay different rates:
- Class 2: Flat rate per week if profits exceed £12,570
- Class 4: 6% on profits between £12,571 and £50,270, then 2% above £50,270
NI and Your Pension
To qualify for the full State Pension, you typically need 35 qualifying years of NI contributions. You can check your NI record online through HMRC to see if you have gaps you might want to fill with voluntary contributions.
When You Stop Paying NI
Once you reach State Pension age, you no longer pay Class 1 NI contributions, even if you continue working.
Our salary calculator includes accurate NI calculations for both employed and self-employed scenarios. Check how much NI you'll pay on your current salary.